DEFENDANTS’ OPP. TO MOT. FOR
CLASS CERTIFICATION
14-CV-6119 CAS (ASX)
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RICHARD B. GOETZ (S.B. #115666)
rgoetz@omm.com
CYNTHIA A. MERRILL (S.B. #254571)
cmerrill@omm.com
MATTHEW A. BAHLEDA (S.B. #301765)
mbahleda@omm.com
O’MELVENY & MYERS LLP
400 South Hope Street
Los Angeles, California 90071-2899
Telephone: (213) 430-6000
Facsimile: (213) 430-6407
MATTHEW D. POWERS (SB# 212682)
mpowers@omm.com
O’MELVENY & MYERS LLP
Two Embarcadero Center, 28th Floor
San Francisco, CA 94111-3823
Telephone: (415) 984-8700
Facsimile: (415) 984-8701
Attorneys for Defendants
FUHU, INC. and FUHU HOLDINGS, INC.
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA – WESTERN DIVISION
SCOTT MILLER, an individual, on
behalf of himself, the general public and
those similarly situated,
Plaintiff,
v.
FUHU, INC. and FUHU HOLDINGS,
INC.,
Defendants.
Case No. 14-CV-6119 CAS (ASx)
DEFENDANTS’ OPPOSITION
TO PLAINTIFF’S MOTION FOR
CLASS CERTIFICATION
Date: November 16, 2015
Time: 10:00 a.m.
Courtroom: Courtroom 5, 2nd Fl.
Judge: Hon. Christina A. Snyder
Case 2:14-cv-06119-CAS-AS Document 111 Filed 10/13/15 Page 1 of 47 Page ID #:2051
TABLE OF CONTENTS
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INTRODUCTION ..................................................................................................... 1
STATEMENT OF FACTS ........................................................................................ 3
I. THE NABI TABLETS AND CHARGING SYSTEMS ................................. 3
A. The “First Generation” Chargers .......................................................... 4
1. nabi 1 ........................................................................................... 4
2. nabi 2 ........................................................................................... 5
a. nabi 2 version 1 charger ................................................... 5
b. nabi 2 version 2 charger ................................................... 6
c. nabi 2 version 3 charger ................................................... 6
B. The Second Generation Chargers ......................................................... 6
II. CUSTOMER EXPERIENCES WITH NABI TABLETS .............................. 7
III. PLAINTIFF’S EXPERIENCES WITH THE NABI 2. .................................. 9
ARGUMENT ........................................................................................................... 11
I. RULE 23(A)’S COMMONALITY REQUIREMENT IS NOT MET. ......... 11
A. “Was the nabi tablet charging system defectively designed or
manufactured such that Fuhu breached its warranty of
merchantability?” ................................................................................ 11
B. “Was Defendants’ marketing of the tablets likely to mislead
reasonable consumers?” ...................................................................... 13
C. “Should this court declare unlawful Fuhu’s amendment to its
TOU imposing a class action waiver?” ............................................... 14
II. THE CLASS CANNOT BE CERTIFIED UNDER RULE 23(B)(3)
BECAUSE OF MATERIAL VARIATIONS OF APPLICABLE LAW. ..... 15
A. The Choice of Law Provision Does Not Apply. ................................. 15
B. California’s “Governmental Interest” Test Requires the
Application of the Law of Each Consumer’s State of Purchase. ........ 17
1. Different States’ Laws Vary in Material Ways. ....................... 18
2. Each State Has a Strong Interest in Applying Its Laws. .......... 18
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3. Other States’ Interests Would Be Impaired. ............................. 19
III. COMMON ISSUES WILL NOT PREDOMINATE. ................................... 20
A. Plaintiff’s Warranty Claims Cannot be Certified. .............................. 20
B. Plaintiff’s Fraud Claims Cannot be Certified. .................................... 24
1. Injury is an Individualized Inquiry. .......................................... 25
2. Plaintiff Cannot Establish Deception, Reliance or
Materiality on a Classwide Basis. ............................................ 28
a. No Evidence of Uniform Material
Misrepresentations.......................................................... 29
b. Plaintiff Offers No Evidence that Fuhu Had a Duty
to Disclose. ..................................................................... 30
C. No Credible Method of Measuring Classwide Damages. .................. 31
IV. PLAINTIFF’S UNCONSCIONABILITY CLAIMS ARE NOT
SUITABLE FOR CLASSWIDE RESOLUTION ......................................... 34
V. PLAINTIFF FAILS TO ESTABLISH TYPICALITY OR
ADEQUACY. ................................................................................................ 35
CONCLUSION ........................................................................................................ 35
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Cases
Abogados v. AT&T, Inc.,
223 F.3d 932 (9th Cir. 2000) ............................................................................... 19
Akkerman v. Mecta Corp.,
152 Cal. App. 4th 1094 (2007) ............................................................................ 20
Algarin v. Maybelline,
300 F.R.D. 444 (S.D. Cal. 2014) ......................................................................... 28
All West Elecs., Inc. v. M-B-W, Inc.,
64 Cal. App. 4th 717 (1998) ................................................................................ 21
Aluminum v. Hunter Engineering Co.,
655 F.2d 938 (9th Cir. Cal. 1981) ....................................................................... 35
Am. Honda Motor Co., Inc. v. Superiori Court,
199 Cal. App. 4th 1367 (2011) ............................................................................ 22
Antoninetti v. Chipotle Mexican Grill, Inc.,
2012 WL 3762440 (S.D. Cal. Aug. 28, 2012) .................................................... 20
Auto Equity v. Superior Court,
57 Cal. 2d 450 (1962) .......................................................................................... 31
Baker v. Microsoft Corp.,
2015 U.S. App. LEXIS 12883 (9th Cir. July 20, 2015) ...................................... 22
Banks v. Nissan,
301 F.R.D. 327 (N.D. Cal. 2013) ........................................................................ 23
Bardin v. DaimlerChrysler,
136 Cal. App. 4th 1255 (2006) ............................................................................ 21
Berger v. Home Depot,
741 F.3d 1061 (9th Cir. 2014) ............................................................................. 29
Binder v. Gillespie,
184 F.3d 1059 (9th Cir. 1999) ............................................................................. 27
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Bridgestone/Firestone Tires Prods. Liab. Litig.,
288 F.3d 1012 (7th Cir. 2012) ............................................................................ 18
C.E. Design Ltd. v. King,
637 F.3d 721 (7th Cir. 2011) ............................................................................... 35
Caldera v. J.M. Smucker Co.,
2014 WL 1477400 (C.D. Cal. Apr. 15, 2014) ............................................... 32, 33
Cannon v. BP,
2013 U.S. Dist. LEXIS 142934 (S.D. Tex. Sept. 30, 2013) ................................ 33
Caro v. Proctor & Gamble Co.,
18 Cal. App. 4th 644 (1993) ................................................................................ 24
Carvalho v. Equifax,
629 F.3d 876 (9th Cir. 2010) ............................................................................... 31
Cholakyan v. Mercedes-Benz,
281 F.R.D. 534 (C.D. Cal. 2012) ........................................................................ 12
Comcast v. Behrend,
133 S. Ct. 1426 (2013) ........................................................................................ 34
Daubert v. Merrell Dow Pharms.,
509 U.S. 579 (1993) ........................................................................................ 3, 32
Daugherty v. Am. Honda Motor Co.,
144 Cal. App. 4th 824 (2006) .................................................................. 21, 30, 31
Davis-Miller v. Automobile Club,
201 Cal. App. 4th 106 (2011) ........................................................................ 25, 28
Eisen v. Porsche,
2012 WL 841019 (C.D. Cal. Feb. 22, 2012) ....................................................... 21
Ellis v. Costco Wholesale Corp.,
657 F.3d 970 (9th Cir. 2011) ........................................................................... 3, 35
Fairbanks v. Farmers New World Life Ins. Co.,
197 Cal. App. 4th 544 (2011) .............................................................................. 13
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Forrand v. Federal Express,
2013 WL 1793951 (C.D. Cal. Apr. 25, 2013) ..................................................... 32
Frenzel v. Aliphcom,
2015 WL 4110811 (N.D. Cal. July 7, 2015) ....................................................... 17
Gen. Tel. Co. of Sw. v. Falcon,
457 U.S. 147 (1982) ............................................................................................ 20
Gianino v. Alacer,
2012 U.S. Dist. LEXIS 32261 (C.D. Cal. Feb. 27, 2012) ................................... 18
Guido v. L’Oreal,
2013 WL 3353857 (C.D. Cal. July 1, 2013) ....................................................... 23
Heisler v. Maxtor,
2010 U.S. Dist. LEXIS 125745 (N.D. Cal. Nov. 17, 2010) ................................ 12
Hernandez v. Burger,
102 Cal. App. 3d 795 (1980) ............................................................................... 19
Hicks v. Kaufman & Broad,
89 Cal. App. 4th 908 (2001) .......................................................................... 22, 25
In re Hitachi Television Optical Block Cases,
2011 WL 9403 (S.D. Cal. Jan. 3, 2011) .............................................................. 18
Horvath v. LG Elecs. MobileComm USA, Inc.,
2012 U.S. Dist. LEXIS 19215 (S.D. Cal. Feb. 13, 2012) ................................... 19
Hovsepian v. Apple Inc.,
2009 WL 2591445 (N.D. Cal. Aug. 21, 2009) .............................................. 21, 25
International Union of Operating Engineers Local No. 68 Welfare
Fund v. Merck & Co., Inc.,
929 A.2d 1076 (N.J. 2007) .................................................................................. 27
Keegan v. Am. Honda Motor Co.,
284 F.R.D. 504 (C.D. Cal. 2012) .................................................................. 17, 18
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Kwikset v. Super. Ct.,
51 Cal. 4th 310 (2011) ......................................................................................... 34
Larson v. Trans Union LLC,
2015 WL 3945052 (N.D. Cal. June 26, 2015) .................................................... 11
Lewallen v. Medtronic,
2002 WL 31300899 (N.D. Cal. Aug. 28, 2002) .................................................. 18
Long v. Hewlett-Packard Co.,
2007 WL 2994812 (N.D. Cal. July 27, 2007) ..................................................... 22
McCann v. Foster Wheeler LLC,
48 Cal. 4th 68 (2010) ........................................................................................... 19
McLaughlin v. Am. Tobacco,
522 F.3d 215 (2d Cir. 2008), abrogated in part by Bridge v.
Phoenix, 553 U.S. 639 (2008) ............................................................................. 26
Minkler v. Kramer Labs.,
2013 WL 3185552 (C.D. Cal. Mar. 1, 2013) ...................................................... 24
Mirkin v. Wasserman,
5 Cal. 4th 1082 (1993) ..................................................................................... 3, 26
Mocek v. Alfa Leisure, Inc.,
114 Cal. App. 4th 402 (2003) .............................................................................. 21
Morgan v. Harmonix,
2009 U.S. Dist. LEXIS 57528 (N.D. Cal. July 7, 2009) ..................................... 31
Nedlloyd Lines B.V. v. Super. Crt.,
3 Cal. 4th 459 (1992) ..................................................................................... 15, 17
O’Shea v. Epson Am, Inc.,
2011 WL 4352458 (C.D. Cal. Sept. 19, 2011) .................................................... 24
Oestreicher v. Alienware Corp.,
322 F. App'x 489 (9th Cir. 2009) ........................................................................ 31
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Offshore Rental Co. v. Cont’l Oil Co.,
22 Cal. 3d 157 (1978) .......................................................................................... 19
Pfizer v. Super. Crt.,
182 Cal. App. 4th 622 (2010) ........................................................................ 25, 34
In re Pom Wonderful,
2014 WL 1225184 (C.D. Cal. Mar. 25, 2014) .............................................. 26, 32
Pulaski & Middleman v. Google Inc.,
2015 U.S. App. LEXIS 16723 (9th Cir. Sept. 21, 2015)..................................... 34
Rikos v. Procter & Gamble Co.,
2012 WL 641946 (S.D. Ohio Feb. 28, 2012) ...................................................... 18
Rutledge v. Hewlett-Packard Co.,
238 Cal. App. 4th 1164 (2015) ............................................................................ 31
Savino v. Computer Credit, Inc.,
164 F.3d 81 (2d Cir. 1998) .................................................................................. 35
Smilovits v. First Solar,
295 F.R.D. 423 (D. Ariz. 2013) ........................................................................... 27
In re Sony,
758 F. Supp. 2d 1077 ( S.D. Cal. 2010) .............................................................. 20
In re St. Jude Med., Inc.,
425 F.3d 1116 (8th Cir. 2005) ............................................................................. 18
Stearns v. Select Comfort,
763 F. Supp. 2d 1128 (N.D. Cal. 2010) ............................................................... 28
Stearns v. Ticketmasters,
655 F.3d 1013 (9th Cir. 2011) ....................................................................... 25, 34
Tait v. BSH,
289 F.R.D. 466 (C.D. Cal. 2012) ........................................................................ 23
In re Tobacco II Cases,
46 Cal. 4th 289 (2009) ......................................................................................... 24
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Torres v. Nissan N. Am., Inc.,
2015 U.S. Dist. LEXIS 120381 (C.D. Cal. Sept. 1, 2015) ............................ 22, 23
Tucker v. Pacific Bell,
208 Cal. App. 4th 201 (2012) ........................................................................ 25, 30
In re Vioxx,
180 Cal. App. 4th 116 (2009) ....................................................................... passim
Wal-Mart Stores, Inc. v. Dukes,
131 S. Ct. 2541 (2011) .................................................................................. 11, 13
Washington Mut. v. Super. Crt.,
24 Cal. 4th 906 (2001) ............................................................................. 15, 17, 18
Webb v. Carter’s Inc.,
272 F.R.D. 489 (C.D. Cal. 2011) ........................................................................ 25
Williams v. Oberon Media, Inc.,
2010 WL 8453723 (C.D. Cal. April 19, 2010) ................................................... 20
Wilson v. Hewlett-Packard Co.,
668 F.3d 1136 (9th Cir. 2012) ................................................................. 21, 30, 31
Wolin v. Jaguar Land Rover N. Am., LLC,
617 F.3d 1168 (9th Cir 2010) ........................................................................ 22, 23
Zinser v. Accufix,
253 F.3d 1180 (9th Cir. 2000), amended 273 F.3d 1266 (9th Cir.
2001 .............................................................................................................. passim
Statutes
28 U.S.C. § 2201 ....................................................................................................... 35
Cal. Bus. & Prof. Code § 17203 ............................................................................... 32
Cal. Bus. & Prof. Code § 17535 ............................................................................... 32
Cal. Civ. Code § 1791.1(c) ....................................................................................... 21
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Cal. Civ. Code § 1793.2(d)(1) .................................................................................. 23
Cal Comm. Code § 2714(2) ...................................................................................... 32
Rules
Fed. R. Civ. P. 23 .................................................................................................. 2, 22
Fed. R. Civ. P. 23(a) ................................................................................................... 2
Fed. R. Civ. P. 23(a)(2) ............................................................................................. 11
Fed. R. Civ. P. 23(a)(3) ............................................................................................. 35
Fed. R. Civ. P. 23(a)(4) ............................................................................................. 35
Fed. R. Civ. P. 23(b) ................................................................................................. 30
Fed. R. Civ. P. 23(b)(3) ............................................................................ 3, 20, 23, 32
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INTRODUCTION
The “nabi” tablets at issue in this case are a huge critical and popular success.
They have repeatedly won honors from electronics experts, educators, and
parenting organizations, including “Top Tablets for Your Kids” (from PC
Magazine), and “Best Tablet for Kids” and “Editor’s Choice” (from Laptop
Magazine).1 In 2013, the National Parenting Center gave the nabi 2 its “Seal of
Approval.” Customers similarly give the tablets high marks—on Amazon.com,
between 40% and 60% (depending on the model) gave the tablets five stars (the
highest possible rating).2 Yet according to Plaintiff Scott Miller (“Plaintiff”), the
fact that chargers sometimes broke means that this Court should conduct a single
trial over whether the tablets are so “defective” that defendants Fuhu, Inc. and Fuhu
Holdings, Inc. (collectively, “Fuhu”) should be forced to issue refunds to all buyers.
Rather than addressing the very real differences in the products, issues, and
customers’ experiences that exist in this case, Plaintiff simply assumes them away.
His motion should be rejected for a host of reasons:
Most buyers never had a problem. Plaintiff’s own expert estimates only 8%
of nabi customers reported any form of charging issue, even after years of use. And
Plaintiff does not allege that those who have never had a problem ever will.
For the minority who experienced an issue, Fuhu responded. First, Fuhu
supplied free replacement chargers, whether or not products were within warranty.
Plaintiff argues that Fuhu
—many of which
1 Declaration of Lisa Lee (“Lee Decl.”) ¶ 9 & Ex. 4.
2 See Declaration of Dr. Keith Ugone (“Ugone Decl.”), attached to Declaration of
Cynthia A. Merrill (“Merrill Decl.”) as Ex. 1, ¶ 33 & Ex. 5.
3 Plaintiff’s Motion for Class Certification (Dkt. # 85) (“Mot.”) at 1:15-16.
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were not “complaints” at all and did not involve malfunctioning chargers4—
(Gist Decl. Ex. 5.)
Plaintiff himself got replacements—and in October 2013, when asked to rate
Fuhu’s customer service, he wrote, “Good, I’m satisfied. Everything was received
and is working properly.” (Id. ¶ 19 & Ex. 9.)
Second, It
dropped one supplier; correspondence Fuhu had with another supplier—which
Plaintiff attaches to his complaint and cites liberally in his motion—shows Fuhu
aggressively pressed to eliminate remaining problems.
There is wide variation among nabi products. Most documents Plaintiff
cites deal only with one model, the nabi 2—and as those same materials show,
Fuhu worked tirelessly to improve that model’s chargers and to give customers
replacement parts. Other models at issue (e.g., the nabi Jr., nabi 2S, nabi DreamTab,
nabi XD) used a completely different rectangular charger that is obviously not
“similar” to the “pin” charger of nabi and nabi 25.
Plaintiff does not establish he can satisfy the prerequisites of FRCP 23.
Plaintiff attempts to meet Rule 23(a)’s commonality requirement by posing
common questions. But these questions are not susceptible of classwide proof—
because of the different designs at issue, the fact that most buyers never have had
and never will have a charging problem, and the fact that Plaintiff does not and
cannot show all purchasers were exposed to the same marketing representations.
There is also no basis to assume uniformity in how buyers would weigh a small risk
of charger malfunction (which Fuhu fixed if it occurred) against the tablets’
features, awards, customer reviews, or their children’s preference for, e.g., a Disney
4 See Decl. of Eric Gist (“Gist Decl.”) ¶ 10.
5 Pictures of the different charger models are attached to the Declaration of Steven
Hsieh (“Hsieh Decl.”) as Exs. 2, 15. The differences are obvious at a glance.
6 Decl. of Kendyl A. Román (“Román Decl.”) (Dkt. # 87) ¶ 257.
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or Star Wars branded tablet. And the arbitration clause Plaintiff challenges does not
even apply to his purchase or his claims.
Still less has Plaintiff demonstrated common questions predominate, as they
must under Rule 23(b)(3). His assertion that California law will govern all claims is
mistaken. The choice of law provisions he cites applies only to actions arising from
use of content on the Fuhu website and firmware updates—not to claims arising
from his tablet purchase or from the alleged charger issues. Class members’
warranty and fraud claims will be governed by the laws of fifty states, which differ
materially. To prevail under California’s warranty laws he would need to show—
and cannot—that class members’ tablets are all substantially certain to malfunction.
Nor can Plaintiff avoid these problems by merely asserting a “design” defect. In the
warranty cases Plaintiff cites on that issue, all class members could point to reduced
performance; not so here. For Plaintiff’s fraud claims, the facts do not permit a
classwide showing of injury or presumption of reliance. Plaintiff tries to skirt this
difficulty by ignoring the realities of class members’ purchases and alleging injury
through a fraud on the market theory (i.e., that the price would have been lower)
that California has rejected. See Mirkin v. Wasserman, 5 Cal. 4th 1082 (1993).7
STATEMENT OF FACTS
I. THE NABI TABLETS AND CHARGING SYSTEMS
There are seven different nabi tablets at issue here, aimed at different ages,
some co-branded with kids’ entertainment properties (e.g., Disney Princesses, Star
Wars, and Nick Jr. themes). The tablets have won a host of awards (Lee Decl. ¶ 9 &
Ex. 4) and
And yes, some nabi customers had problems with recharging the tablets.
7 Much of Plaintiff’s proffered expert testimony ignores the facts in this case. As set
out in Fuhu’s Expert Objections, the testimony is largely inadmissible under
Daubert v. Merrell Dow Pharms., 509 U.S. 579, 589 (1993). See Ellis v. Costco
Wholesale Corp., 657 F.3d 970, 982 (9th Cir. 2011) (Daubert analysis is necessary
to determine admissibility of expert testimony at the class certification stage).
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In this Amazon.com and Facebook age, the complaints of that minority are easily
visible to the buying world (including Plaintiff). But other customers raved about
the benefits and durability of these tablets; overall, customers have given the tablets
high marks in online reviews, citing their durability, ease of use, parental controls,
free software and customer service. (See, e.g., Ugone Decl. Exs. 4 & 5).
A. The “First Generation” Chargers
1. nabi 1
The first nabi (“nabi 1”) was an off-the-shelf tablet manufactured by Livall.
(Hsieh Decl. ¶ 6.) The nabi 1 included a charger cable designed by Livall and
manufactured by Best System (HK) Limited. (Id.) The cable had a cylindrical tip, to
be inserted into the tablet’s charging port; the other end attached to an AC adapter
that was plugged into a wall socket. (Id.) The nabi 1 could also be charged through
its micro-USB port with a cable attached to a computer. (Id.)
Shortly after nabi 1 launched in December 2011,
(Id. ¶ 7
& Ex. 3.) Fuhu acted immediately to address the issue on several fronts. As the first
calls came in, Fuhu provided customers with new chargers. (Id. Ex. 3.)
(Id.) But Fuhu did
not wait for the customers to contact the company. On December 31, 2011, it
reached out through Fuhu’s Facebook page to advise users how they could work
around broken chargers, inform consumers that the “[t]he charger [not the battery]
is the main source of the problem,” and explain that it was working to provide free
replacement chargers for customers with charging problems. (Lee Decl. ¶ 7 & Ex.
3.) Although Fuhu initially considered providing free replacement chargers through
a retailer, it ultimately decided to send them to customers themselves. (Id. ¶ 8.)
Even customers who had not experienced any problems could request a
replacement charger “just in case” and Fuhu would split the cost. (Id.)
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Meanwhile, Fuhu worked to improve the chargers. It switched manufacturers
and worked with Livall and a new manufacturer, Keen High (“KH”), to correct
possible quality control issues that might have caused the charger problems and to
produce replacement chargers. (Hsieh Decl. ¶ 8 & Ex. 4.)
2. nabi 2
a. nabi 2 version 1 charger
The nabi 2 tablet, designed and manufactured by KH, launched in July 2012.
(Id. ¶ 9.) The nabi 2 ultimately employed three different charging systems.
(Id. ¶ 10.)
Once again, Fuhu pushed for a solution. In August 2012,
(Id. Ex. 9.)
As before, Fuhu gave out
free chargers while it worked to develop a new charger. (Id. Ex. 9.)8
8
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b. nabi 2 version 2 charger
Fuhu and KH then developed a second version of the nabi 2 charging system,
c. nabi 2 version 3 charger
Fuhu and KH continued to explore ways to improve the chargers’ durability.
In mid-2013,
, a different AC adapter, and was furnished by a different supplier. (Id.; Hsieh
Dep. at 48:23-49:23 .) Beginning in July 2013, Fuhu included this version 3 charger
with all tablets in its inventory. (Hsieh Decl. ¶ 19.)
B. The Second Generation Chargers
For later nabi models, Fuhu developed its own charging tip, the “nabi
connector.”
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; it looks and operates nothing like the
charger for the nabi 1 or nabi 2 tablets and has been used on all other nabi models.
(Hsieh Decl. ¶ 20 & Ex. 15.) After Fuhu produced prototypes of the nabi
Connector, intended for trade shows, demonstration models and reviewers,
II. CUSTOMER EXPERIENCES WITH NABI TABLETS
The percentage of
users who actually experienced a charging malfunction is quite small. And those
users who reported malfunctions to Fuhu, including Plaintiff himself, saw their
problems promptly addressed through free replacement chargers and tablets.
That data is laid out in detail in the Declaration of Eric Gist, who runs Fuhu’s
“nabi cares” customer support division. As Mr. Gist explains,
That number likely
overstates the actual rate of malfunctions: Not every ticket coded as charger-related
reflects a genuine malfunction; in some cases, a consumer might have a question
about operation or a problem that can be resolved over the phone. (Id. ¶ 10 & Ex.
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3.) In addition, a customer might call several times, creating many tickets for a
single issue. (Id. ¶ 10 & Ex. 4.)
Fuhu’s data on charger and tablet replacements also shows limited problems.
Because this data is maintained by different systems, figures for inquiries and
replacements cannot simply be added together to derive a “failure rate” for nabi
tablets. (Id. ¶ 14.)
The
customer declarations that are submitted with this Opposition illustrate the excellent
customer and warranty service that Fuhu is known for.9
9 See Declarations of M. Covert, K. Edmondson, A. Ehman, S. Larsen, B. Nathan.
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III. PLAINTIFF’S EXPERIENCES WITH THE NABI 2.
On July 27, 2012, Plaintiff purchased a nabi 2 for $199 from a Best Buy in
Lakeland, Florida for use by his grandson, who was five at the time. (Deposition of
Scott Miller (“Miller Dep.”), attached to Merrill Decl. as Ex. 3, at 33:9-34:8.)
Plaintiff kept the charger at his house because he thought it inappropriate for a child
to charge an electronic device. (Id. at 48:21-49:10; 139:16-18.) His grandson would
typically use the device at Miller’s house, or take it home without the charger. (Id.
at 48:21-23.) The nabi 2 initially worked well. (Id. at 38:8-41:14; 71:15-23.) But
then, Plaintiff claims, he began to experience three occasional problems.
First, he claims his tablet would occasionally crash while charging, and need
to be reset before it would charge. (Decl. of Scott Miller [Dkt. # 77] (“Miller
Decl.”) ¶ 5.) This occurred about four times within the first month, but Plaintiff did
not perceive it to be significant enough to return the tablet. (Miller Dep. at 114:10-
115:16; 121:20-122:7; 123:13-16; 71:15-72:25.) He never informed Fuhu of this
problem, which continued to occur “intermittently.” (Id. at 121:20-122:20.)
Second, starting in late 2012, the screen of his tablet would get “warm”10
while charging. (Id. at 126:12-127:2.) This occurred a dozen times between
December 2012 and September 2013 and was solved by unplugging the device and
charging it after the tablet had cooled. (Id. at 123:9-124:5; 100:14-102:10.) Again,
he never reported this to Fuhu. (Id. at 127:3:-7.)
Third, by November or December 2012, every two or three times Plaintiff
attempted to use the tablet, it would not turn on after charging unless it had a full
charge or would abruptly turn off, despite apparently having a partial charge.
(Miller Decl. ¶ 5; Miller Dep. at 129:9-17.) However, the tablet could still be turned
on and used after being charged. (Miller Dep. at 130:1-18; 131:8-18.) Plaintiff did
10
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not contact Fuhu about this, either. (Id. at 132:18-133:7.)11
Instead, on December 27, 2012, Plaintiff wrote to Fuhu to report errors in
Fuhu’s Nabi University learning software. (Gist Decl. ¶ 16 & Ex. 6 ; Miller Dep. at
183:17-184:6.) Then Plaintiff emailed Fuhu again the next day. (Gist Decl. ¶ 17 &
Ex. 7.) His second email mentions “some charger cord problems,” but reported that
he “love[s] the actual tablet.” (Id. Ex. 7) Plaintiff did not specifically report the
issues he now claims he had, did not return the tablet, and did not ask for a new
charger. (Id.)
Plaintiff’s grandson continued to use the tablet throughout the warranty
period. (Miller Dep. at 133:21-134:8; 200:10-202:8.) On or around September 16,
2013 (a month after his warranty expired) Plaintiff requested a replacement charger
through Fuhu’s website, and Fuhu shipped one free of charge. (Id. at 196:12-
197:14; 201:20-22; Gist Decl. ¶ 18 & Ex. 8.) Plaintiff acknowledges that this
replacement charger cured the problems he allegedly had previously experienced.
(Miller Dep. at 203:15-18.) And when Fuhu asked him to rate its customer service
in October 2013, Plaintiff responded “Good, I’m satisfied” and reported that
“Everything was received and is working properly.” (Gist Decl. ¶ 19 & Ex. 9.)
Nevertheless, Plaintiff now claims the replacement charger later created a
new problem, namely that he could not use the tablet while it was charging and
only when it was not plugged in. (Miller Dep. at 203:15-204:1.) Plaintiff did not
report this post-warranty problem to Fuhu or attempt to return the tablet and
continued to use the tablet, at least sporadically, until June 2014. (Id. at 203:15-
204:4; 88:18-89:7.) In December 2014, during the pendency of this litigation and
17 months after his warranty had expired, Plaintiff requested a second replacement
charger. (Miller Dep. at 197:27-198:24; 203:10-204:1.) Fuhu again provided him
11 Though Plaintiff claims to have contacted Fuhu about the problems by requesting
a new charger in late 2012, neither he nor Fuhu have any record of this request.
(Miller Dep. at 184:15-185:24; 194:3-195:9; Gist Decl. ¶¶ 15-21.)
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one free of charge. (Gist Decl. Ex. 11; Miller Dep. at 201:12-22.)
ARGUMENT
I. RULE 23(a)’S COMMONALITY REQUIREMENT IS NOT MET.
A party seeking certification must “affirmatively demonstrate” that the
prerequisites are met, including the “commonality” requirement of Rule 23(a)(2).
Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541, 2551 (2011). The burden is on the
Plaintiff to show, “by a preponderance of the evidence, that the prerequisites have
been met.” Larson v. Trans Union LLC, 2015 WL 3945052, at *3 (N.D. Cal. June
26, 2015) (citation omitted). While Rule 23(a)(2) speaks in terms of “common
questions of law or fact,” the Supreme Court has emphasized that it is not sufficient
to raise purported “common questions,” as Plaintiff does. Id. What matters is “the
capacity of a classwide proceeding to generate common answers apt to drive the
resolution of the litigation.” Dukes, 131 S. Ct. at 2551 (citation omitted; emphasis
in original). Here, Plaintiff has not carried his burden of showing the questions he
identifies can actually be resolved on a classwide basis.
A. “Was the nabi tablet charging system defectively designed or
manufactured such that Fuhu breached its warranty of
merchantability?”
In arguing that the “defect” is common as to the entire class (Mot. at 21:4-
22:7), Plaintiff ignores obvious (and crucial) differences between the multiple nabi
models,
The entire array of nabi charging systems cannot possibly suffer from a
common design defect, as Plaintiff asserts, because they do not share a common
design. Plaintiff’s expert, Kendyl Román, opines that
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But even he admits important differences between the five or more
versions. (
The lack of a
common defect defeats Plaintiff’s assertion of commonality. See Cholakyan v.
Mercedes-Benz, 281 F.R.D. 534, 553 (C.D. Cal. 2012) (commonality not satisfied
where plaintiff failed “to identify a single part or system that is the cause of the
water leaks”); Heisler v. Maxtor, 2010 U.S. Dist. LEXIS 125745, at *12 (N.D. Cal.
Nov. 17, 2010) (“Plaintiffs cannot show that a common defect exists simply by
making conclusory allegations that [Defendant’s] manufacturing process is
substandard.”).
In addition, Plaintiff ignores differences in the tablets’ performance.
Even if Mr. Román
had identified a credible industry standard,12 the evidence shows that the tablets’
performance varied significantly and that a simple comparison to a single
“standard” is impossible.
12 The “standard” Mr. Román cites is misleading; it represents a “yield” rate (or rate
of defect for product coming off an assembly line) not a rate of problems reported
during actual use. In any event, Mr. Román lacks the expertise to testify about the
“industry standard.” He admits he has no idea what the true failure rates are (for
chargers or otherwise) for the “comparable” products he identifies in his own
Declaration. (Román Dep., attached to Merrill Decl. as Ex. 4, at 209:10-210:12,
243:19-245:11.)
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Like the question of defect, the question of whether the tablets were
“unsuitable” for children cannot be resolved “in one stroke,” Dukes, 131 S. Ct. at
2551, when different tablets were designed for children of different ages (toddlers
to “tweens”) and displayed different malfunctions.13
B. “Was Defendants’ marketing of the tablets likely to mislead
reasonable consumers?”
Next, Plaintiff contends that an objective, reasonable consumer standard is
employed to assess the alleged deceptiveness and materiality of marketing and
advertising claims, obviating the need for individualized proof. (See Mot. at 22:8-
23:28.) But he overlooks the showing necessary to prove that class members were
all injured in the same way by the same allegedly deceptive marketing: that class
members were all exposed to the same representations. See, e.g., Fairbanks v.
Farmers New World Life Ins. Co., 197 Cal. App. 4th 544, 562 (2011) (class action
for fraudulent business practice under the UCL requires that a defendant have
“engaged in uniform conduct likely to mislead the entire class”).
Plaintiff nowhere identifies even one allegedly false advertisement that class
members all purportedly relied on in purchasing nabi tablets. Plaintiff himself
testified that, prior to buying his nabi, he viewed (1) reviews on third-party
websites (Miller Dep. at 43:24-44:7), (2) technical specifications for the nabi 2 at
www.nabitablet.com (id. at 52:21-53:11) (3) possibly the nabi 2 user manual on the
Fuhu website (id. at 164:22-165:15), (4) external packaging for the nabi 2 (id. at
62:2-24) and (5) “shelf cards” and displays about the nabi 2 at Walmart and Best
Buy (id. at 53:15-55:25.) Of these materials, only the nabi packaging would
necessarily have been presented to all class members prior to purchase—and the
packaging neither mentions rechargeability nor provides a list of included
13 Although Plaintiff offers Mr. Román’s opinion on this issue, Mr. Román is
plainly unqualified to opine about the tablets’ suitability for children. He claims
expertise in child development--although he has never taken a class, has no degree,
and has never written on the topic--because he has more experience working with
children “than the average person.” (Román Dep. at 222:14-223:25.)
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components. (Lee Decl. ¶¶ 4-5 & Exs. 1-2.) And Plaintiff offers no evidence that all
or even most nabi purchasers read the packaging prior to purchase. Plaintiff viewed
the box merely to confirm that he was getting the product he requested, not to
“persuade me further” and could not recall whether the packaging stated that the
tablet was “rechargeable.” (Id. at 62:20-63:2, 63:24-64:1.) Plaintiff cannot propose
a single trial over Fuhu’s “deceptive” statements when he has yet to identify even
one “misrepresentation” seen by all class members.
Nor is the materiality of the alleged omissions a common question in this
case. The allegedly concealed defect is a risk of malfunction and that risk varies
widely from model to model, and (as discussed in the concurrently filed Declaration
of Dr. Keith Ugone) consumers’ willingness to accept the risk will necessarily turn
on the importance to them of other features of the nabi tablet such as parental
controls, screen size, applications, co-branding and content from popular kids’
entertainment. See In re Vioxx, 180 Cal. App. 4th 116, 129 (2009) (“if the issue of
materiality or reliance is a matter that would vary from consumer to consumer, the
issue is not subject to common proof, and the action is not properly certified as a
class action”). (See also Ugone Decl. Ex. 7.)
C. “Should this court declare unlawful Fuhu’s amendment to its TOU
imposing a class action waiver?”
Plaintiff accuses Fuhu of “surreptitiously” adding an arbitration clause to its
website Terms of Use (“TOU”) as a “silver bullet” to end this lawsuit. (See Mot. at
14:16-18.) But Fuhu has never taken any steps to enforce the arbitration clause in
this case, or argued that it applies to Miller’s claims or the claims of any class
member. That is because (as is discussed in Section II.A below) the TOU that
contains the arbitration clause governs use of the Fuhu website, not all purchases
of Fuhu products. The TOU (and the arbitration clause) does not apply here.
Plaintiff’s “unconscionability” claim apparently rests on a contention that the
addition of the arbitration clause improperly burdened “class members’ pre-existing
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rights,” including software updates promised at the time of purchase. (Mot. at 24:7-
11.) But Plaintiff nowhere identifies the source of any such “promise.” Nabi
purchasers were certainly never promised unconditional access to software updates
indefinitely.14 Indeed, as Plaintiff recognizes in his Motion, the TOU to which users
agreed prior to September 24, 2014 quite clearly explained that “Fuhu reserves the
right, at its sole discretion, to change, modify, add or remove portions of these
Terms, at any time. . . . Your continued use of the Site following the posting of
changes will mean that you accept and agree to the changes.” (Merrill Decl. Ex. 5.)
Plaintiff identifies no promise to purchasers (much less a uniform one) that
superseded those unambiguous statements. In short, there is no issue to resolve.
II. THE CLASS CANNOT BE CERTIFIED UNDER RULE 23(b)(3)
BECAUSE OF MATERIAL VARIATIONS OF APPLICABLE LAW.
A. The Choice of Law Provision Does Not Apply.
Plaintiff maintains that common questions of law predominate “because all
class members’ claims are governed by California law.” (Mot. at 27:15-16.)
Plaintiff predicates his assertion on a choice of law provision included in the Fuhu
website TOU. (Merrill Decl. Ex. 5.)
Under California choice of law rules, the Court must “first examine the
choice-of-law clause and ascertain whether the advocate of the clause has met its
burden of establishing that the various claims of putative class members fall within
its scope.” Washington Mut. v. Super. Crt., 24 Cal. 4th 906, 916 (2001) (citing
Nedlloyd Lines B.V. v. Super. Crt., 3 Cal. 4th 459, 468-70 (1992)).15
The choice of law provision is contained in the TOU posted on the Fuhu
website. As the TOU itself makes clear, it applies to use of the website and its links:
14 The nabi 2 User Guide states that “nabi™ software updates are available over the
air”, but does not state that users have unconditional access to them or that any
particular update will be provided in the future. (Merrill Decl. Ex. 6.)
15 See also Zinser v. Accufix, 253 F.3d 1180, 1187, amended 273 F.3d 1266 (9th
Cir. 2001) (“A federal court sitting in diversity must look to the forum state’s
choice of law rules to determine the controlling substantive law.”); accord Mazza v.
Am. Honda, 666 F.3d 581, 589 (9th Cir. 2012).
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Fuhu, Inc. and its affiliates (“Fuhu”) provide various goods and
services, including but not limited to web properties and
applications (the “Fuhu Property”). These Terms and Conditions of
Use (the “Terms”) apply to the Fuhu website located at
www.fuhu.com, and all associated sites linked to www.fuhu.com by
Fuhu, its subsidiaries and affiliates, including Fuhu sites around the
world (collectively, the “Site”) The Site is the property of Fuhu. BY
USING THE SITE, YOU AGREE TO THESE TERMS. IF YOU
DO NOT AGREE, DO NOT USE THE SITE.
(Merrill Decl. Ex. 5 (emphasis added).) Fuhu emphasizes that the TOU governs use
of the Site: “As long as you comply with these Terms, Fuhu grants you a personal,
non-exclusive, non-transferable, limited privilege to enter and use the Site.” (Id.) As
part of the TOU, the choice of law provision is necessarily limited by the TOU’s
scope and applicability. The provision itself clarifies that its acceptance is triggered
by visiting a “Fuhu Property” (that is, “web properties and applications”) and
therefore must be read as reaching applications, services and purchases available
through the Site, not the purchase of nabi tablets elsewhere:
By visiting a Fuhu Property, you agree that all matters relating to
your access to or use of the Site, products or services sold or
distributed by or through Fuhu, including all disputes, will be
governed by the laws of the United States and by the laws of the
State of California, without regard to principles of conflicts of laws.
(Id. ) Nowhere does Fuhu state that the TOU or its choice of law provision governs
purchases of Fuhu products made from third parties or use of a nabi tablet and
charger apart from access to the website.
Plaintiff attempts to evade these facts by suggesting that the TOU is
“incorporated into the Nabi Terms of Service Agreement.” (Mot. at 28:1.) But the
nabi Terms of Service, which govern the establishment and use of on-line nabi
accounts, merely advise consumers of various applicable polices: “Fuhu’s Terms of
Use [http://www.fuhu.com/en/terms_of_service.html] and Privacy Policy
[http://www.fuhu.com/en/orivacy_policy.html] also apply to your use and your
children’s use of nabi.” (Merrill Decl. Ex. 7.) The Terms of Service do not purport
to expand the reach of the Fuhu TOU, which expressly applies to use of the Fuhu
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website, to govern tablet warranties or purchases not from the website.
That use of a nabi tablet may require registration on a Fuhu website or
involve downloading of applications does not change this analysis. In Frenzel v.
Aliphcom, 2015 WL 4110811 (N.D. Cal. July 7, 2015), the court rejected a claim,
similar to Plaintiff’s here, that a choice of law provision in a website Terms of Use
governed UCL, CLRA and FAL claims alleging that an electronic wristband fitness
device did not provide the advertised battery life or accurately record sleep patterns,
caloric consumption or movements. Although the choice of law provision applied
to the “Terms of Use and any actions related thereto,” and the plaintiff argued that
the website and its applications reported battery data and maintained account and
registration data, the court found that “this is not case where the claims at issue
‘emanat[e] from the agreement or the legal relationships it creates.’” Id. at *8
(quoting Nedlloyd, 3 Cal. at 470). The same is true here: Plaintiff has not alleged
that charging problems are related to use of the Fuhu website or applications.
B. California’s “Governmental Interest” Test Requires the
Application of the Law of Each Consumer’s State of Purchase.
Where, as here, there is no an applicable choice of law provision, California
courts analyze choice of law questions under the “governmental interest” test. The
test first considers whether the “law in each potentially concerned state ...
materially differs from the law of California.” Wash. Mut., 24 Cal. 4th at 919. If it
does, the court must next determine whether the other state has an interest “in
having its own law applied,” and finally, which state’s interests would be “‘more
impaired’ if its law were not applied.” Id. at 920; Mazza v. Am. Honda Motor Co.,
666 F. 3d 581, 590 (9th Cir. 2012). As in Mazza, Plaintiff’s claims cannot be
certified because “each class member’s consumer protection claim should be
governed by the consumer protection laws of the jurisdiction in which the
transaction took place.” Mazza, 666 F.3d at 594; see also Keegan v. Am. Honda
Motor Co., 284 F.R.D. 504, 545-49 (C.D. Cal. 2012) (same for express warranty).
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1. Different States’ Laws Vary in Material Ways.
Consumer Protection Statutes. State consumer protection laws vary in
material ways, including the applicable statutes of limitations; requirements of
scienter, reliance and causation; the availability of class actions; and the availability
of damages, statutory penalties, and punitive damages. See, e.g., Gianino v. Alacer,
2012 U.S. Dist. LEXIS 32261, at *6-7, *11-12 (C.D. Cal. Feb. 27, 2012); Mazza,
666 F.3d at 590-91; In re Hitachi Television Optical Block Cases, 2011 WL 9403,
at *6 (S.D. Cal. Jan. 3, 2011); In re St. Jude Med., Inc., 425 F.3d 1116, 1120 (8th
Cir. 2005); Bridgestone/Firestone Tires Prods. Liab. Litig., 288 F.3d 1012, 1018
(7th Cir. 2012). Those differences are set forth in Appendix A.
Express Warranty Claims. States’ express warranty laws vary in regard to
reliance, pre-suit notification, and privity. See Keegan, 284 F.R.D. 545-49 (material
differences in New York, California, and North Carolina warranty laws); Rikos v.
Procter & Gamble Co., 2012 WL 641946 (S.D. Ohio Feb. 28, 2012) (rejecting
nationwide class under California choice of law rules because of differences in
warranty laws). Those differences are set forth in Appendix B.
2. Each State Has a Strong Interest in Applying Its Laws.
Since the conflicts here are material (see Appendices A and B) the court must
“determine what interest, if any, each state has in having its own law applied to the
case.” Wash. Mut., 24 Cal. 4th at 920. “[E]every state has an interest in having its
law applied to its resident claimants.” Mazza, 666 F.3d at 591-92 (quoting Zinser,
253 F.3d at 1187); see also Lewallen v. Medtronic, 2002 WL 31300899, at *5 (N.D.
Cal. Aug. 28, 2002) (“each of the fifty states may have an interest in seeing that its
law is applied in an action involving one of its own injured citizens”). Moreover,
consumer protection laws reflect important policy judgments by each state about
the conduct permitted within its borders, and each state has a strong interest in
applying its own consumer protection laws to the transactions that take place within
its borders—even if another state’s law might be more favorable to consumers.
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Mazza, 666 F.3d at 591-92. Because state policy makers seek to balance protecting
consumers and attracting businesses, “[e]ach state has an interest in setting the
appropriate level of liability for companies conducting business within its
territory,” and it is error to discount “each state’s valid interest in shielding out-of-
state businesses from what the state may consider to be excessive litigation.” Id. at
592 (citing McCann v. Foster Wheeler LLC, 48 Cal. 4th 68, 91 (2010)).
3. Other States’ Interests Would Be Impaired.
The last prong requires the court to determine “which state’s interest would
be more impaired if its policy were subordinated to the policy of the other state.”
Mazza, 666 F.3d at 590 (quoting McCann, 48 Cal. 4th at 81-82); see also Offshore
Rental Co. v. Cont’l Oil Co., 22 Cal. 3d 157, 164-65 (1978). Courts must “decide—
in light of the legal question at issue and the relevant state interests at stake—which
jurisdiction should be allocated the predominating lawmaking power under the
circumstances of the present case.” McCann, 48 Cal. 4th at 97.
California recognizes that in regulating conduct, “the place of the wrong has
the predominant interest.” Mazza, 666 F.3d at 593 (citing Hernandez v. Burger, 102
Cal. App. 3d 795, 802 (1980); Abogados v. AT&T, Inc., 223 F.3d 932, 935 (9th Cir.
2000). The “place of the wrong” is the state where the last event necessary to make
the actor liable took place. Mazza, 666 F.3d at 593. Here, that is where a class
member purchased a tablet. See Horvath v. LG Elecs. MobileComm USA, Inc., 2012
U.S. Dist. LEXIS 19215, at *10-11 (S.D. Cal. Feb. 13, 2012) (in case alleging that
manufacturing and design defects made phones unmerchantable, place of the wrong
was the state where the phone was purchased); McCann, 48 Cal. 4th at 94 n.12 (the
geographic location of an omission is the place of the transaction where it should
have been disclosed). Thus the consumer protection and warranty laws of
individual class members’ states govern their claims. And since many elements of
those claims vary materially among the states, common questions of law and fact
will not predominate.
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III. COMMON ISSUES WILL NOT PREDOMINATE.
Even apart from the choice of law, Plaintiff does not, and cannot, show that
Rule 23(b)(3)’s predominance requirement is satisfied. The essential question is
whether issues “subject to generalized proof ... predominate over those issues that
are subject only to individualized proof.” Williams v. Oberon Media, Inc., 2010 WL
8453723, at *7 (C.D. Cal. April 19, 2010). Common issues predominate only when
they constitute such a significant portion of the action that “there is a clear
justification for handling the dispute on a representative rather than on an individual
basis.” Antoninetti v. Chipotle Mexican Grill, Inc., 2012 WL 3762440, at *5-6 (S.D.
Cal. Aug. 28, 2012). “[I]f a class action ‘will splinter into individual trials,’
common questions do not predominate and litigation of the action in the class
format is in appropriate.” Akkerman v. Mecta Corp., 152 Cal. App. 4th 1094, 1102
(2007)(internal citations and references omitted).
A. Plaintiff’s Warranty Claims Cannot be Certified.
To determine which aspects of the case are common, the Court must review
each element of Plaintiff’s causes of action and the facts necessary to litigate those
elements. Gen. Tel. Co. of Sw. v. Falcon, 457 U.S. 147, 160 (1982) (“[T]he class
determination generally involves considerations that are ‘enmeshed in the factual
and legal issues comprising the plaintiff’s cause of action.’”). Plaintiff’s warranty
claims will require individualized proof that, among other things: (1) the class
member’s product malfunctioned, (2) during the warranty period, (3) notice was
provided to Fuhu of the malfunction, (4) Fuhu failed to remedy it—and for the
implied warranty claim, that (5) the malfunction was “sufficiently serious” to
render the product “unfit for its ordinary purpose, and (6) the class member is in
privity (i.e., bought directly from Fuhu).16
16 Vertical privity is a necessary element of an implied warranty claim. See In re
Sony, 758 F. Supp. 2d 1077, 1100 ( S.D. Cal. 2010)(plaintiff must allege vertical
privity for all putative class members to survive a motion to dismiss); see also All
West Elecs., Inc. v. M-B-W, Inc., 64 Cal. App. 4th 717, 725 (1998). Here, all
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Hence, class members must be able to show that a malfunction occurred
within the first year after purchase.17 And to make out a claim for breach of implied
warranty, malfunction alone is not enough. A plaintiff must establish that the
product “did not possess even the most basic degree of fitness for ordinary use.”
Mocek v. Alfa Leisure, Inc., 114 Cal. App. 4th 402, 406 (2003); see also Hovsepian
v. Apple Inc., 2009 WL 2591445, at *6 (N.D. Cal. Aug. 21, 2009)(same).
Under California law, then, consumers whose chargers functioned through
the end of the warranty have no claim as a matter of law. Wilson v. Hewlett-
Packard Co., 668 F.3d 1136, 1141 (9th Cir. 2012) (“manufacturer’s duty to
consumers is limited to its warranty obligations absent either an affirmative
representation or a safety issue”);18Daugherty v. Am. Honda, 144 Cal. App. 4th 824
(2006) (rejecting claims for post-warranty malfunctions because the “only
expectation buyers could have had about the F22 engine was that it would function
properly for the length of Honda’s express warranty”); Bardin v. DaimlerChrysler,
136 Cal. App. 4th 1255 (2006) (same). That is because, “[a]bsent a manufacturer
representation as to the life span of the part in question, ... the only expectation that
a purchaser could have had was that the product would function properly for the
members of the Warranty Subclass purchased their tablets directly from third-party
retailers. (Second Amended Complaint (“SAC”) (Dkt. # 50) ¶ 83.)
17 Fuhu’s express warranty has a one-year limit. (Merrill Decl. Ex. 8 (Limited
Warranty) (limiting warranty to one year and stating that “no warranty is provided
for the specifications for any other components or for any performance that can
degrade naturally with normal use for one year.”).) Under California law, an
implied warranty of merchantability is coextensive in duration with an express
warranty, to a maximum of one year. Cal. Civ. Code § 1791.1(c).
18 The “safety” exception, established by Daugherty v. Am. Honda Motor Co.,144
Cal. App. 4th 824 (2006), exists to protect unwary consumers who could face a
serious risk of injury from using a product; the mere possibility of some purported
“hazard” is not enough to create a duty of disclosure. See Eisen v. Porsche, 2012
WL 841019, at *1 (C.D. Cal. Feb. 22, 2012) (engine defect that could leave drivers
stranded on the road, “susceptible to being hit by another vehicle,” was too
speculative to constitute a safety concern as a matter of law).
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duration of the manufacturer’s express warranty.” Long v. Hewlett-Packard Co.,
2007 WL 2994812, at *8 (N.D. Cal. July 27, 2007). Thus, when a class member’s
charger malfunctioned (if at all) is as crucial a component of the claim as whether
the charger malfunctioned—and an issue that will require individualized proof.
Plaintiff asserts that it does not matter that the vast majority of nabi chargers
operated effectively for years—relying primarily on Wolin v. Jaguar Land Rover N.
Am., LLC, in which the court held that “proof of the manifestation of a defect is not
a prerequisite to class certification.” 617 F.3d 1168, 1173 (9th Cir 2010). However,
in Wolin, the alleged defect (the wheel assembly) caused excessive tire wear on all
vehicles from the first day of operation. Here there is no such certainty of loss –
only a risk. Moreover, the Ninth Circuit has emphasized that in Wolin it “did not
adopt a per se rule requiring class certification of defect claims.” Baker v. Microsoft
Corp., 2015 U.S. App. LEXIS 12883 (9th Cir. July 20, 2015). And while Wolin
addressed federal procedural law, it did not address substantive California warranty
law. See Torres v. Nissan N. Am., Inc.,2015 U.S. Dist. LEXIS 120381, at *12 (C.D.
Cal. Sept. 1, 2015) (noting that claims in Wolin were brought under Michigan and
Florida consumer protection laws and that “plaintiff’s burden to prove that common
issues predominate is inextricably linked with the substantive law that governs the
underlying claims alleged.”) Confronted with circumstances very similar to those
here, the Torres court held that Wolin must be modified by California warranty law
“requiring proof that a defect is ‘substantially certain to manifest in malfunction
during the useful life of the product.’” Id. (quoting Am. Honda, 199 Cal. App. 4th
1367, 1376 (2011)).19 In other words, even if classwide manifestation of a defect is
not always necessary for certification under Rule 23, to prove a warranty claim
under California law a plaintiff must establish that it is substantially certain that the
19 See also Hicks, 89 Cal. App. 4th at 923 (homeowners whose foundations had not
“already cracked or split” must show that “their foundations contain an inherent
defect which is substantially certain to result in malfunction” to establish a breach.).
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defect will manifest (and as discussed above, the claims are barred entirely if the
warranty has expired with no malfunction). Because the plaintiffs in Torres offered
evidence that only 200 owners out of thousands had complained about the
performance of the vehicle at issue, the court found that “Plaintiffs have failed to
provide evidence that all class members are substantially certain to experience a
malfunction from the alleged defect,” and therefore individual issues would
predominate.20 Id. at *13-14.
So too here.
On these facts, Plaintiff cannot possibly establish to a “substantial certainty”
that all putative class members’ chargers will fail or malfunction. In fact, the
evidence powerfully suggests the opposite.
Plaintiff’s warranty claims are not certifiable under Rule 23(b)(3) for a
another reason as well: Whether Fuhu breached its warranty does not turn on
malfunction alone. Instead, the Court must also consider whether Fuhu honored its
one-year warranty by “refund[ing] the purchase price, or repair[ing] or replac[ing]
the product, using new or refurbished components within a reasonable time during
the warranty period.” (Merrill Decl. Ex. 8.)21 Plaintiff has offered no evidence
indicating that he can establish a systemic or classwide breach of the nabi express
warranty, and the evidence—thousands of customers who received warranty service
and declarations from nabi customers who received exactly the replacements and
repairs they requested22—demonstrates that such a showing cannot be made.
Hence Plaintiff’s warranty claims will necessarily require individualized facts.
20 None of the district court cases Plaintiff cites as applying Wolin addresses
California warranty claims. Guido v. L’Oreal, 2013 WL 3353857, at *5 (C.D. Cal.
July 1, 2013) addresses Wolin on typicality. Neither of the other two cases
addresses the requirements of California warranty claims. See Banks v. Nissan, 301
F.R.D. 327 (N.D. Cal. 2013); Tait v. BSH, 289 F.R.D. 466 (C.D. Cal. 2012).
21 See also Cal. Civ. Code § 1793.2(d)(1).
22 See Gist Decl. Ex. 5; Declarations of M. Covert, K. Edmonson, E. Ehman, S.
Larsen, and B. Nathan.
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B. Plaintiff’s Fraud Claims Cannot be Certified.
Like Plaintiff’s warranty claims, his statutory and common law fraud claims
cannot be adjudicated on a classwide basis. Each requires Plaintiff to prove that the
entire class was exposed to a deceptive claim or actionable omission about the nabi
chargers, that there is some causal link between the representation or omission and
their alleged harm, and that class members suffered an injury due to their purchases.
The CLRA, for example, “requires that plaintiffs ... show not only that a
defendant’s conduct was deceptive but that the deception caused them harm.” In re
Vioxx Class Cases, 180 Cal. App. 4th at 129. In some cases, causation and reliance
may be established on a classwide basis if the court finds that a misrepresentation
or omission is material. Id. “[H]owever, if the issue of materiality or reliance is a
matter that would vary from consumer to consumer, the issue is not subject to
common proof, and the action is properly not certified as a class action.” Id. (citing
Caro v. Proctor & Gamble Co.,18 Cal. App. 4th 644, 668 (1993)).
And while the California Supreme Court held in Tobacco II that relief under
the UCL and FAL can be available for absent class members “without
individualized proof of deception, reliance and injury,” Tobacco II, 46 Cal. 4th 298,
320 (2009), the UCL and FAL still require that absent class members have
standing—that is, an “injury in fact” resulting from the defendant’s alleged
misconduct. Mazza, 666 F.3d at 594 (“no class may be certified that contains
members lacking Article III standing”); Minkler v. Kramer Labs., 2013 WL
3185552, at *3 (C.D. Cal. Mar. 1, 2013) (class of “all” buyers rejected because “the
Class will include members who derived benefit from [the product] and are
satisfied users of the product.… ‘[s]uch members have no injury and no standing to
sue’” (citation omitted)).23 As courts have repeatedly clarified in the wake of
23 See also, e.g., O’Shea v. Epson Am, Inc., 2011 WL 4352458, at *8-10 (C.D. Cal.
Sept. 19, 2011) (denying class certification and holding that absent class members
must have Article III standing to bring a UCL claim); Webb v. Carter’s Inc., 272
F.R.D. 489, 498 (C.D. Cal. 2011) (a class action under the UCL and FALL cannot
“proceed” “where class members lack Article III standing”).
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Tobacco II, “factual questions of reliance by class members on allegedly false
representation[s] remain[ ] a proper criterion for trial court consideration when
examining commonality.” Tucker v. Pacific Bell, 208 Cal. App. 4th 201, 227
(2012). An inference of reliance (which Plaintiff seeks to apply here) is not proper
in every case. “A presumption of reliance does not arise when class members ‘were
exposed to quite disparate information from various representatives of the
defendant.’” Mazza, 666 F.3d at 596 (citing Stearns v. Ticketmasters, 655 F.3d
1013, 1020 (9th Cir. 2011)); Davis-Miller v. Automobile Club, 201 Cal. App. 4th
106, 125 (2011) (“An inference of classwide reliance cannot be made where there is
no evidence that the allegedly false representations were uniformly made to all
members of the proposed class.”). Where an inference of classwide reliance and
injury is not proper, courts refuse certification of FAL and UCL classes. See Mazza,
666 F.3d at 596; Pfizer v. Super. Crt., 182 Cal. App. 4th 622, 632-33 (2010).
1. Injury is an Individualized Inquiry.
Given the facts of this case, Plaintiff cannot rely on generalized proof of
injury. Most purchasers of the nabi tablets suffered no charger malfunction and of
those who did, many received replacement chargers. Consumers who purchase a
product with an allegedly undisclosed risk that never manifests have not been
injured because they reaped the benefits for which they paid. See, e.g., Hicks v.
Kaufman & Broad, 89 Cal. App. 4th 908, 923 (2001) (“Cars and tires have a
limited useful life. . . . If the defect has not manifested itself in that time span, the
buyer has received what he bargained for.”); Hovsepian, 2009 U.S. Dist. LEXIS
117562, at *8 (rejecting class that includes members “who have not experienced
any problems with their [allegedly defective] iMac display screens. Such members
have no injury and no standing to sue.”)
Plaintiff fails to identify any evidence by which he might establish that all
class members’ tablets are devalued by an alleged but unmanifested defect: Plaintiff
offers no proof of a resale market for nabi tablets that would be impacted by a
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known defect. Nor has he attempted to establish the expected lifespan of a nabi
tablet in order to show that a charger defect that has not manifested after years of
satisfactory use may nevertheless shorten the lifespan (and decrease the value) of
the tablet. Similarly, Plaintiff has not shown, or even suggested, that no consumers
would have purchased a nabi had they known of the alleged risk of “defect.”
Instead, Plaintiff argues that all users suffered an economic injury because
“the tablets were worth less than the prices at which Fuhu sold them because of the
undisclosed charging system defects and safety risks.” (Mot. at 32:15-17.) In effect,
Plaintiff seeks to apply a “fraud on the market” theory of injury, contending that the
price of nabi tablets was inflated and would have been lower had Fuhu disclosed
the “defect.” This sort of “price inflation” theory derives from securities cases
involving stock exchanged in an efficient market that, theoretically, immediately
adjusts to new information. See In re Pom Wonderful, 2014 WL 1225184, at *3
(C.D. Cal. Mar. 25, 2014). The theory assumes—as Plaintiff claims here—that
every consumer was similarly damaged, regardless of satisfaction with the product
or motivations behind the purchase. Id. at *4. But California has rejected that theory
even in the securities context where it originated. Mirkin, 5 Cal. 4th at 1108. And
because “the market for consumer goods . . . is anything but efficient,” courts have
found that the “fraud on the market” theory is inapplicable in consumer class
actions.24 “In an inefficient market . . . some information is not reflected in the price
of an item. . . . In such a market, even a material misrepresentation might not
necessarily have any effect on prices.” In re Pom Wonderful, 2014 WL 1225184 at
*4 (internal citation omitted) (rejecting fraud on the market theory where
defendants allegedly misrepresented health benefits of juice products).25
24 McLaughlin v. Am. Tobacco, 522 F.3d 215, 224 (2d Cir. 2008), abrogated in part
by Bridge v. Phoenix, 553 U.S. 639 (2008).
25 See International Union of Operating Engineers Local No. 68 Welfare Fund v.
Merck & Co., Inc., 929 A.2d 1076, 1088 (N.J. 2007) (“To the extent that plaintiff
intends to rely on a single expert to establish a price effect in place of a
demonstration of an ascertainable loss or in place of proof of a causal nexus
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Plaintiff offers no support whatsoever for his assumption that a purported
“fraud on the market”—that is, undisclosed defects in the nabi charging systems –
suffices as evidence of a classwide injury. As an initial matter, neither Plaintiff nor
his experts attempt to show that the market for electronic products for children is
efficient. See Smilovits v. First Solar, 295 F.R.D. 423, 429 (D. Ariz. 2013) (“Courts
... require class plaintiffs to prove market efficiency at the class certification
stage.”) (citing cases); see also Binder v. Gillespie, 184 F.3d 1059, 1064-65 (9th
Cir. 1999) (affirming decertification of class where there was insufficient proof of
an efficient market). And Plaintiff’s experts simply assume that the market price of
nabi tablets has never reflected awareness of charging problems, even though
information was posted by Fuhu on Facebook as early as December 2011 (Lee
Decl. Ex.7) and is available in customer reviews on sites such as Amazon.com.
(Merrill Decl. Ex. 9.) In other words, Plaintiff’s theory of injury assumes, at one
and the same time, that the market price did not respond to Fuhu’s disclosures on
Facebook and consumer postings elsewhere, but would have responded to some
other (undefined) disclosure by Fuhu. (See Ugone Decl. ¶ 84.)
Ultimately, Plaintiff’s theory presumes what it is Plaintiff’s burden to
establish: that injury can be ascertained on a classwide basis. It simply
homogenizes, when it does not distort, class members’ experiences. Regardless of
the “average” diminution of value Plaintiff’s expert, Dr. J. Michael Dennis,
proposes to calculate,26
Others experienced charging problems that were
corrected when Fuhu supplied a replacement charger or tablet.27 And still others
between defendant's acts and the claimed damages . . . , plaintiff’s proofs would
fail. That proof theory would indeed be the equivalent of fraud on the market, a
theory we have not extended to CFA claims.”).
26 Decl. of J. Michael Dennis (“Dennis Decl.”) (Dkt. # 76).
27 Courts have rejected classes that do “not exclude persons who already have
received refunds or replacement parts or who have not suffered any damages at
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would have bought a nabi at the price they actually paid, with full knowledge of the
risk of charging problems, because they desired nabi applications or parental
controls not available elsewhere. As economist Dr. Keith Ugone explains, from an
economic perspective those consumers have suffered no injury of any kind. (Ugone
Decl. 93-96.) Determining which customers (if any) do have an injury will require
individual assessments, which will swamp common issues.
2. Plaintiff Cannot Establish Deception, Reliance or
Materiality on a Classwide Basis.
Plaintiff contends that “the common question of whether Defendants’
misrepresentations were deceptive to a reasonable consumer predominates over any
individualized issue of reliance that Defendants may raise.” (Mot. at 30:13-16.) But
as noted above, a presumption of classwide reliance is not permitted under the
CLRA where the issues of materiality and reliance would “vary from consumer to
consumer.” In re Vioxx, 180 Cal. App. 4th at 129. And such a presumption is
improper under the UCL and FAL as well “where there is no evidence that the
allegedly false representations were uniformly made to all members of the proposed
class,” Davis-Miller, 201 Cal. App. 4th at 125.
Plaintiff alleges that Fuhu misrepresented that the nabi tablets were
“rechargable” and were “made for kids;” he further alleges that Fuhu failed to
disclose that the nabi charging systems did not reliably recharge the tablets, were
unsuitable for use by children and created safety hazards. (SAC ¶¶ 101, 119,
148(a), (b).) But Plaintiff never actually identifies the alleged “misrepresentations”
and he cannot show that Defendants had any duty to disclose the charger
malfunctions. He thus fails to carry his burden of showing how he will establish
all.” Stearns v. Select Comfort, 763 F. Supp. 2d 1128, 1152 (N.D. Cal. 2010); see
also Algarin v. Maybelline, 300 F.R.D. 444, 455 (S.D. Cal. 2014) (rejecting class
that “does not exclude purchasers who have already received refunds ... As the
UCL only permits recovery or restitution/disgorgement, for purchasers who have
already received refunds, they have already been compensated well over any
potential disgorgement. These purchasers have no claims.”)
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classwide exposure and materiality warranting a presumption of reliance. See
Berger v. Home Depot, 741 F.3d 1061 (9th Cir. 2014) (plaintiff failed to show the
entire class was exposed to the alleged misrepresentation).
a. No Evidence of Uniform Material Misrepresentations.
While Plaintiff maintains that he can provide classwide proof of material
misrepresentations, he nowhere identifies even one such allegedly false
advertisement that class members purportedly relied on in purchasing nabi tablets.
(See, e.g., SAC ¶ 22.) Plaintiff alludes vaguely to Fuhu’s marketing the tablets for
children, but offers no evidence that Fuhu ever represented that the chargers—as
opposed to the tablets themselves—could or should be used by children. In fact, the
entire nabi system expressly assumes some adult supervision. (Merrill Decl. Ex. 6.)
Plaintiff himself distinguished between the tablet, which he routinely sent home
with his grandson, and the charging system, which he did not permit the child to
use because he understood (like most consumers) that small children should not be
allowed to plug in electrical devices. (Miller Dep. at 49:5-10.)
Not only does Plaintiff fail to show that all class members were exposed to
the same information about the nabi charging systems, he likewise fails to address
how he will establish the materiality of the alleged “misrepresentations” when
charging problems occurred with different nabi models at vastly different rates.
(See Gist Decl. Ex. 5.) Many of those rates are so low that no reasonable consumer
could possibly contend that they would have impacted their purchase decision—
particularly where, as here, Fuhu fixed the problems that did arise. (See id.) Yet
Plaintiff does not even attempt to distinguish this case from those where materiality
and reliance would “vary from consumer to consumer” due to individual consumer
needs and preferences, precluding common proof and class certification. See In re
Vioxx, 180 Cal. App. 4th at 129. The alleged defect here is a risk of malfunction.
Such a risk, and the possibility of needing a replacement charger, may be
insignificant to one consumer, yet important to another.
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In sum, Plaintiff has failed to demonstrate that the record permits a class-
wide inference of reliance. Tucker v. Pac. Bell Mobile Servs., 208 Cal. App. 4th
201, 228 (2012) (“The rule permitting an inference of common reliance where
material misstatements have been made to a class of plaintiffs will not arise where
the record will not permit it.”) In the circumstances of this case, deception,
materiality and reliance will all require individualized inquiries, defeating
certification of Plaintiff’s fraud claims under Rule 23(b).
b. Plaintiff Offers No Evidence that Fuhu Had a Duty to
Disclose.
In addition to affirmative misrepresentations, Plaintiff alleges that Fuhu
failed to disclose certain product defects to consumers—specifically, that the nabi
charging systems did not reliably recharge the tablets, were unsuitable for use by
children and created safety hazards. (SAC ¶¶ 101, 119, 148(a), (b).). But Plaintiff
fails to adduce any evidence suggesting that Fuhu had a duty to disclose.
As the Ninth Circuit has explained, “California courts have generally rejected
a broad obligation to disclose, adopting instead the standard as enumerated by the
California Court of Appeal in Daugherty ….” Wilson,, 668 F.3d at 1141.
Daugherty held a manufacturer is not liable for a fraudulent omission concerning a
latent defect under the CLRA, unless the omission is “contrary to a representation
actually made by the defendant, or an omission of a fact the defendant was obliged
to disclose.” Daugherty, 144 Cal. App. 4th at 835. As the Ninth Circuit noted in
Wilson, “California federal courts have generally interpreted Daugherty as holding
that ‘[a] manufacturer’s duty to consumers is limited to its warranty obligations
absent either an affirmative misrepresentation or a safety issue.’” Wilson, 668 F.3d
at 1141(quoting Oestreicher v. Alienware Corp., 322 F. App'x 489, 493 (9th Cir.
2009)); see also Morgan v. Harmonix, 2009 U.S. Dist. LEXIS 57528, at *11-12
(N.D. Cal. July 7, 2009) (“According to all relevant case law, defendants are only
under a duty to disclose a known defect in a consumer product when there are
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safety concerns associated with the product’s use.”).28
Here, the vast majority of charging problems described by Plaintiff
(including his own) presented no risk of injury. While Plaintiff does allege that nabi
charging systems created “safety” hazards,
To be sure, Mr.
Fujioka made much of this reported episode when exhorting his suppliers to
improve the quality of the chargers. (See id. Ex. 5.)
Thus Plaintiff cannot establish a classwide presumption of reliance based on an
omission.
C. No Credible Method of Measuring Classwide Damages.
A plaintiff seeking Rule 23(b)(3) certification must produce evidence of a
measure of damages both that can be applied classwide and that ties the plaintiff’s
legal theory to the impact of the defendant’s alleged conduct. See Forrand v.
Federal Express, 2013 WL 1793951, at *3 (C.D. Cal. Apr. 25, 2013). Plaintiff’s
proposed damages methods fail to carry this burden.
28 Rutledge v. Hewlett-Packard Co., 238 Cal. App. 4th 1164 (2015), currently on
petition for review by the California Supreme Court, does not alter this analysis.
Rutledge questions whether material defects (not only unreasonable safety hazards)
give rise to a duty to disclose. But as discussed above, materiality cannot be
presumed here. Even if this Court were to find that Rutledge conflicts with
Daugherty, the Court can and should follow Daugherty. In diversity cases, the
federal court’s duty is to “ascertain and apply the existing California law.”
Carvalho v. Equifax, 629 F.3d 876, 889 (9th Cir. 2010).) California trial courts
must choose which decision to follow if two Court of Appeal decisions conflict. See
Auto Equity v. Superior Court, 57 Cal. 2d 450, 456 (1962).
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While Plaintiff’s CLRA and common law fraud claim permit actual damages,
the UCL and FAL only permit restitution. See In re Vioxx, 180 Cal. App. 4th at
131; Cal. Bus. & Prof. Code § 17203; Cal. Bus. & Prof. Code § 17535. Restitution
may be measured as “[t]he difference between what the plaintiff paid and the value
of what the plaintiff received.” In re Vioxx, 180 Cal. App. 4th at 131. Similarly,
“[t]he measure of damages for breach of warranty is the difference at the time and
place of acceptance between the value of the goods accepted and the value they
would have had if they had been as warranted.” Cal Comm. Code 2714(2).
Plaintiff’s damages expert proposes to measure classwide damages through
either a “Full Refund” model, which would restore the entire price a class member
paid for a nabi tablet, or a “Diminution in Value” model, which purports to measure
the difference between “what customers had originally bargained for” and “what
they got.” (See Decl. of Lee L. Selwyn (“Selwyn Decl.”) (Dkt. # 86) ¶¶ 13, 19.)
Plainly, the “Full Refund” model is inapplicable here, where Plaintiff cannot show
that the entire class received no benefit all from the nabi tablets. “Restitution based
on a full refund would only be appropriate if not a single class member received
any benefit from the products.” Caldera v. J.M. Smucker Co., 2014 WL 1477400, at
*4 (C.D. Cal. Apr. 15, 2014) ; see also In re Pom Wonderful LLC, 2014 WL
1225184, at *3 & n.2 (“[T]he Full Refund model depends upon the assumption that
not a single consumer received a single benefit . . . from Defendant’s juices.”).
Dr. Selwyn’s “Diminution in Value” method is likewise inadequate, for
reasons detailed in Fuhu’s Daubert challenges. And even if the method were
capable of measuring such a discount, it would not capture classwide damages
because most nabi tablets functioned entirely as intended and many consumers
whose tablets did malfunction received replacement chargers from Fuhu at no cost.
Dr. Dennis’ proposed survey (which he has not actually performed) cannot
measure class members’ “valuation” of the nabi tablets because it ignores
consumers’ actual purchasing decisions. (Hauser Decl. ¶¶ 22, 28, 42-44.) That
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precise failing is what has led other courts to reject the approach. See Cannon v.
BP, 2013 U.S. Dist. LEXIS 142934, at *37-38 (S.D. Tex. Sept. 30, 2013) (rejecting
CVM analysis of property values because it was not a reliable method to establish
class-wide damages, noting in part that “[C]ontingent valuation analysis is a
survey-technique that attempts to value things that do not typically have a market
price.”) Here, the proposed survey does not take account of either differences
between the various nabi tablets (which generated sharply different rates of
complaint and requests for replacement) or differences among consumers, many of
whom would still have purchased their nabi (at the original price) even knowing of
the charger difficulties some consumers have experienced.29 See Caldera, 2014 WL
1477400 at *4 (“In reality, the true value of the products to consumers likely varies
depending on the individual consumer’s [sic] motivation for purchasing the
products at issue”). Nor does it consider actual market considerations, such as the
available alternative tablets or their prices (which may themselves have a history of
charger difficulties). And it ignores whether the “market” price already reflects
consumer awareness of the “defect”– e.g., from reading Amazon.com reviews.
Even if Dr. Dennis’s method could adequately calculate a discounted price
for a nabi tablet with a risk of charger malfunction, it would still fail to offer an
appropriate measure of classwide damages, because it assumes all class members
are entitled to restitution in the amount of the discount. But, again, those consumers
who received a nabi tablet that functioned for the entire life of the warranty or who
received a free replacement tablet or charger have no injury and no possible claim
under any legal theory. See. e.g., Pfizer v. Super. Crt., 182 Cal. App. 4th 622, 629-
630 (2010) (one who could not possibly have lost money or property as a result of
practices prohibited by the UCL is not entitled to restitution).
Ultimately, Plaintiff’s damages models cannot establish predominance of
29 Ugone Decl. ¶ 52-55, 95; Decl. of John R. Hauser (“Hauser Decl.”), attached to
Merrill Decl. as Ex. 10, ¶¶ 37, 42-44.
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common issues for same reasons that common issues of law and fact do not
predominate as to liability: Plaintiff’s claims are based on multiple products that
share no common defect or history of malfunction and his class encompasses
consumers with widely varying product experiences.30
IV. PLAINTIFF’S UNCONSCIONABILITY CLAIMS ARE NOT
SUITABLE FOR CLASSWIDE RESOLUTION
Plaintiff brings both a CLRA claim and a request for declaratory judgment,
alleging that the arbitration clause in the TOU is unconscionable as to class
members who purchased nabi tablets prior to September 24, 2014. But as detailed
above in Section II.A, the TOU applies only to disputes arising from use of and
purchases through the Fuhu website – not to the “defect” claims in this case.
The CLRA requires proof not only of a deceptive trade practice but of actual
harm resulting from that practice. See In re Vioxx, 180 Cal. App. 4th at 129.
However, the new clause impacts only those users who were still using their tablets
as of September 24, 2015, and had pre-existing claims against Fuhu related to use
of its website that the user would have to agree to arbitrate to receive software
updates. It is unclear whether any such class members even exist, and Plaintiff
offers no means of determining who those class members are. Most of the proposed
class likely did not suffer harm from the TOU addition and cannot properly bring
30 Pulaski & Middleman v. Google Inc., 2015 U.S. App. LEXIS 16723 (9th Cir.
Sept. 21, 2015) does not alter this result. As in Kwikset v. Super. Ct., 51 Cal. 4th
310 (2011)—on which Pulaski relies—in Pulaski there was a specific
representation accompanying each sale that was false, and all customers were
injured because ads were not all placed on more-valuable websites as had been
promised. The facts here are quite different. Fuhu never told consumers (much less
all consumers in a standard representation) that chargers would never fail. To the
contrary, Fuhu’s warranty states—both explicitly and implicitly by its very
existence—that malfunctions could occur. As Judge Paez says in Pulaski (quoting
Stearns v. Ticketmaster, 655 F.3d 1013, 1020 (9th Cir. 2011), an injury occurs
where a defendant “puts out tainted bait and a person sees it and bites ….” Pulaski,
2015 U.S. App. LEXIS at *13. Here, Fuhu didn’t put out “bait” about the power
supplies: there was no representation that chargers would never fail, and Fuhu
replaced the small minority of chargers that did break. Also, since most nabi
chargers operated as intended, Plaintiff cannot show his damages model matches
his theory of liability, as required under Comcast v. Behrend,133 S. Ct. 1426
(2013).
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suit for declaratory judgment31 or receive restitution or damages under the CLRA.
V. PLAINTIFF FAILS TO ESTABLISH TYPICALITY OR ADEQUACY.
Finally, Plaintiff also fails to establish that his claims and defenses are
“typical of the claims or defenses of the class,” Fed. R. Civ. P. 23(a)(3), and that he
will “fairly and adequately protect the interests of the class,” Fed. R. Civ. P.
23(a)(4). The typicality requirement assures that the interest of the named
representative aligns with the interests of the class. See Ellis v. Costco, 657 F.3d
970, 984-85 (9th Cir. 2011). Plaintiff cannot establish typicality here because he
lacks an express warranty claim, having never requested a repair or replacement
during the warranty period. Plaintiff has also failed to establish that his claims,
which will be governed by Florida law, will be typical of the claims of the majority
(or even a sizable percentage) of the class he seeks to represent.
Nor can Plaintiff show that he is an adequate class representative. Courts
recognize that the credibility of the plaintiff bears on his ability to adequately
represent the class. See Savino v. Computer Credit, Inc., 164 F.3d 81, 87 (2d Cir.
1998); see also C.E. Design Ltd. v. King, 637 F.3d 721, 726 (7th Cir. 2011). Here,
Plaintiff’s motivations and credibility in bringing suit must be questioned because
while his complaint alleges that Fuhu provides inadequate response to consumers
experiencing problems with nabi chargers, when asked to rate Fuhu’s service in
October 2013, he reported that “Everything was received and is working properly.”
(Gist Decl. ¶ 19 & Ex. 9.) Moreover, Plaintiff admits that he has served as a named
plaintiff in at least two other class actions. (Miller Dep. at 11:16-19, 13:2-4.)
CONCLUSION
For the reasons set forth above, Plaintiff’s motion should be denied.
31 The Declaratory Judgment Act, 28 U.S.C. § 2201, applies only to an “actual
controversy.” See Societe de Conditionnement en Aluminum v. Hunter Engineering
Co., 655 F.2d 938, 942-44 (9th Cir. Cal. 1981).
Case 2:14-cv-06119-CAS-AS Document 111 Filed 10/13/15 Page 45 of 47 Page ID #:2095
1 Dated: October 12, 2015
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Richard B. Goetz
Attorneys for Defendan
and Fuliu Holdings
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CERTIFICATE OF SERVICE BY EMAIL
2 I declare under penalty of perjury that on October 12, 2015, I caused the
3 foregoing document, Defendants' Opposition to Plaintiff's Motion for Class
4 Certification, to be served by email on the following counsel of record for Plaintiff
5 Scott Miller:
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GUTRIDE SAFIER LLP
Adam J.Gutride(adam@gutridesafier.com)
Seth A. Safier ( seth(cy,_gutndesafier.com)
Todd Kennedy (toda@gutridesafier.com)
Marie A. Mccrary (mane@,gutridesafier.com)
100 Pine Street, Suite 125{}
San Francisco, CA 94111
12 Executed on October 12, 2015 at Los Angeles, California.
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CERTIFICATE OF SERVICE
14-cv-6119 CAS (ASx)
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