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Arabian v. Sony Electronics Inc.

February 22, 2007

THEODORE ARABIAN, MARTIN SAUER, EKREM SARAC, STEVE VARADI, AND DAVID JOHNSON, ON BEHALF OF THEMSELVES INDIVIDUALLY AND ALL OTHERS SIMILARLY SITUATED, (DOC. # 43) PLAINTIFFS,
v.
SONY ELECTRONICS INC., DEFENDANT.



The opinion of the court was delivered by: Hayes, Judge

ORDER DENYING MOTION FOR CLASS CERTIFICATION

The matter before the Court is Plaintiffs' "Motion for Certification of Action As a Class Action" ("Motion for Certification"). (Doc. # 43.)

I. Background

On September 8, 2005, Plaintiffs*fn1 filed this action for monetary damages and injunctive relief against Defendant Sony Electronics, Inc. ("Sony") on behalf of (1) "[a] nationwide Class of all persons in the United States who purchased Sony Vaio GRX laptops"; and (2) "[a] Class of all persons in the United States and Canada who purchased Sony Vaio FX laptops." (Compl. ¶ 18.) Additionally, Plaintiffs have proposed the following sub-class: "All Class members who purchased the FX series of Laptops in the State of California." (Mem. Supp. Mot. Class Certification at 7.)

Plaintiffs' Complaint alleges that "Sony has marketed, advertised, sold, and serviced its Sony Vaio GRX and FX series laptop/notebook computers ... through the use of misleading information concerning the memory capacity of the machines." (Id. ¶ 2.) Specifically, Plaintiffs allege that the Sony Vaio GRX and FX series computers are normally sold with either 128 or 256 megabytes ("MB") but include the specific feature that the memory is expandable to 512 MB of RAM, configured over two memory slots. (Id. ¶ 29.) Plaintiffs allege that the second memory slot of these computers contain a manufacturing defect which can result in the computer being unable to read the second slot's available memory, thus making half of the advertised memory capacity of 512 MB of RAM unavailable to the user. (Id. ¶¶ 29-33.)

Based upon these allegations, Plaintiffs make the following claims under California law: (a) violations of the Unfair Competition Law, Cal. Bus. & Prof. Code §§ 17200, et seq.; (b) False and Misleading Advertising, Cal. Bus. & Prof. Code §§ 17500, et seq.; (c) violations of the Consumer Legal Remedies Act, Cal. Civ. Code §§ 1750, et seq.; (d) violations of the Song-Beverly Consumer Warranty Act, Cal. Civ. Code §§ 1790, et seq; (e) breach of express warranty pursuant to Cal. Commercial Code § 2313; and, (f) breach of the implied warranty of merchantability pursuant to Cal. Commercial Code § 2314. (Compl. ¶ 7.)

On July 3, 2006, this Court stayed the portion of this action dealing with the GRX series of laptop computers because of the pendency of a state court proceeding, Hapner v. Sony Electronics, Inc., Cause No. GIC839244 (Superior Court of San Diego County, California), where a class had been certified with respect to the alleged GRX series memory-slot defect.*fn2 (Doc. # 38.) As the Hapner action did not involve the FX series computers, this action was not stayed as to that series.

On July 31, 2006, Plaintiffs filed their Motion for Certification pursuant to Federal Rule of Civil Procedure 23, asking this Court to certify this action to proceed as a class action on behalf of all persons in the United States and Canada who purchased Sony Vaio FX series laptop computers. Sony opposes the Motion. On January 16, 2007, after receiving written briefs and evidentiary materials from both sides, the Court heard oral argument from counsel.

II. Legal Standard for Class Certification

Federal Rule of Civil Procedure 23 ("Rule 23") governs class actions. "As the party seeking class certification, [plaintiff] bears the burden of demonstrating that she has met each of the four requirements of Rule 23(a) and at least one of the requirements of Rule 23(b)." Zinser v. Accufix Research Inst., 253 F.3d 1180, 1186 (9th Cir. 2001), as amended, 273 F.3d 1266 (9th Cir. 2001) (citing Hanon v. Dataproducts Corp., 976 F.2d 497, 508 (9th Cir. 1992)). Before certifying a class, "the trial court must conduct a 'rigorous analysis'" to determine whether a plaintiff has met the Rule 23 requirements.*fn3 Id. (quoting Valentino v. Carter-Wallace, Inc., 97 F.3d 1227, 1233 (9th Cir. 1996)).

The four requirements of Rule 23(a) are: "(1) numerosity (a class [so large] that joinder of all members is impracticable); (2) commonality (questions of law or fact common to class); (3) typicality (named parties claims or defenses are typical ... of the class); and (4) adequacy of representation (representatives will fairly and adequately protect the interests of the class)." Mego Fin. Corp. Sec. Litig. v. Nadler, 213 F.3d 454, 462 (9th Cir. 2000) (internal quotations omitted).*fn4

In addition to showing that each of Rule 23(a)'s requirements are met, Plaintiffs also must show they satisfy Rule 23(b) in one of two ways: (1) under subsection (b)(2), if the party opposing the class has acted or refused to act on grounds applicable to the class generally, thereby making injunctive or declaratory relief appropriate with respect to the class as a whole; or, (2) under subsection (b)(3), if the questions of law or fact common to the class "predominate" over questions affecting individual members, and, on balance, a class action is superior to other methods available for adjudicating the controversy. See Fed. R. Civ. P. 23(b).*fn5

In analyzing whether a plaintiff has met his burden to show that the above requirements are satisfied, a court is to "analyze[] the allegations of the complaint and the other material before [the court] (material sufficient to form reasonable judgment on each [Rule 23] requirement)." Blackie v. Barrack, 524 F.2d 891, 900-01 (9th Cir. 1975) (noting further that a court is to take the substantive allegations in the complaint as true); see also Hanon, 976 F.2d at 509 (finding that the court may consider evidence to ascertain whether Rule 23 has been met although the evidence relates to the merits); Sepulveda v. Wal-Mart Stores, Inc., 237 F.R.D. 229, 233 (C.D. Cal. 2006) ("[B]ecause 'the class determination generally involves considerations that are enmeshed in the factual and legal issues comprising the plaintiff's cause of action,' a court must often look behind the pleadings 'to evaluate carefully the legitimacy of the named plaintiff's plea that he is a proper class representative under Rule 23(a).'") (quoting Gen. Tel. Co. of the Sw. v. Falcon, 457 U.S. 147, 160 (1982) (citations and internal quotation marks omitted)). And while a court should not conduct a hearing on the merits of the plaintiffs' claims when determining class certification, see Valentino, 97 F.3d at 1232, the issue of certification "generally involves considerations that are enmeshed in the factual and legal issues comprising the plaintiff's cause of action." Coopers & Lybrand v. Livesay, 437 U.S. 463, 469 (1978). In summary, "notwithstanding its obligation to take the allegations in the complaint as true, the Court is at liberty to consider evidence which goes to the requirements of Rule 23 even though the evidence may also relate to the underlying merits of the case." In re Unioil Secs. Litig., 107 F.R.D. 615, 618 (C.D. Cal. 1985).

A district court is granted "broad discretion" to determine whether the Rule 23 requirements have been met. Zinser, 253 F.3d at 1186; see also In re Mego Fin. Corp. Sec. Litig., 213 F.3d 454, 461 (9th Cir. 2000) ("The district court's decision certifying the class is subject to a very limited review and will be reversed only upon a strong showing that the district court's decision was a clear abuse of discretion.") (quotations omitted).

III. Discussion

In their Motion for Class Certification, Plaintiffs ask the Court to certify the following Class and Sub-Class:

Class: All persons or entities in the United States and Canada, who purchased FX series of Laptops. Excluded from the Class are Defendant, its affiliates, employees, officers and directors, persons or entities which distribute or sell the Laptops, the Court, and the legal representatives, heirs, successors or assigns of any such excluded party.

Sub-Class: All Class members who purchased the FX series of Laptops in the State of California. Excluded from the Class are Defendant, its affiliates, employees, officers and directors, persons or entities which distribute or sell the Laptops, the Court, and the legal representatives, heirs, successors or assigns of any such excluded party.

(Mot. Class Certification at 1 (emphasis in original).)*fn6 Plaintiffs further ask the Court to certify Plaintiff David Johnson (a California resident) as representative of the Class and Sub-Class, Plaintiff Ekrem Sarac (a Canadian resident) as representative of the Class, and Plaintiffs' counsel as Class Counsel.

The Court now turns to an analysis of the requirements of Rule 23.

A. Rule 23(a) Requirements

1. Rule 23(a)(1) - Numerosity

The "numerosity" requirement is satisfied if "the class is so numerous that joinder of all members is impracticable." Fed. R. Civ. P. 23(a)(1). The Ninth Circuit has held that this requirement can be satisfied with a class of as little as 39 members, particularly if it is impracticable for the class members to be joined in the suit (e.g., because the size of each individual claim is relatively small or because the members are geographically diverse). See Jordan v. Los Angeles County, 669 F.2d 1311, 1319 (9th Cir. 1982), vacated on other grounds, 459 U.S. 810 (1982); cf. Doe v. Los Angeles Unified Sch. Dist., 48 F. Supp. 2d 1233, 1239 (C.D. Cal. 1999) ("The exact size of the class need not be known so long as general knowledge and common sense indicate that it is large."). Plaintiffs submit evidence indicating that Sony sold hundreds of thousands of FX laptops in the United States. (Ferguson Decl. ¶ 6, Ex. D.) Because of the immense size of the proposed Class (and Sub-Class), and the obvious impracticability of joining all purchasers of FX laptops into a single suit, the Court finds that the numerosity requirement is satisfied.

2. Rule 23(a)(2) - Commonality

A class has sufficient commonality "if there are questions of fact and law which are common to the class." Fed. R. Civ. P. 23(a)(2). According to the Ninth Circuit:

The commonality preconditions of Rule 23(a)(2) are less rigorous than the companion requirements of Rule 23(b)(3). Indeed, Rule 23(a)(2) has been construed permissively. All questions of fact and law need not be common to satisfy the 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.

Hanlon v. Chrysler Corp., 150 F.3d 1011, 1019 (9th Cir. 1998).

In its briefing, Sony does not challenge the commonality requirement of Rule 23(a)(2), instead saving its arguments for the related, but more rigorous, "predominance" requirement of Rule 23(b)(3). Plaintiffs also focus their arguments on the Rule 23(b)(3) requirement (i.e., whether the questions of law or fact common to the members of the class predominate over any questions affecting only individual members). Given the permissive construction of Rule 23(a)(2), the Court likewise will assume that Rule 23(a)(2)'s commonality requirement has been satisfied.

3. Rule 23(a)(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." Fed. R. Civ. P. 23(a)(3). "The purpose of the typicality requirement is to assure that the interest of the named representative aligns with the interests of the class." Hanon v. Dataproducts Corp., 976 F.2d 497, 508 (9th Cir. 1992) (citation omitted). According to the Ninth Circuit, "[t]ypicality refers to the nature of the claim or defense of the class representative, and not to the specific facts from which it arose or the relief sought." Id. (quotation omitted). "[R]epresentative claims are 'typical' if they are reasonably co-extensive with those of absent class members; they need not be substantially identical." Hanlon v. Chrysler Corp., 150 F.3d 1011, 1020 (9th Cir. 1998). "The test of typicality is whether other members have the same or similar injury, whether the action is based on conduct which is not unique to the named plaintiffs, and whether other class members have been injured by the same course of conduct." Hanon, 976 F.2d at 508 (quotation omitted).

Sony contends that each of the proposed Class representatives, Johnson and Sarac, are subject to unique defenses, such that they fail to meet the typicality requirement. For instance, Sony argues that both proposed representatives will be subject to the following unique defenses: failure to qualify as a "consumer" under the Consumer Legal Remedies Act because both purchased their laptops for commercial purposes; and failure to satisfy California's vertical privity requirement (because they bought their computers from third parties, rather than from Sony) as required for a claim of breach of the implied warranty of merchantability. Sony further argues that Johnson's claims are subject to a statute-of-limitations defense (i.e., Johnson purchased his FX laptop on August 23, 2001 and filed suit September 8, 2005, allegedly after the four-year limitations period expired) as well as unique defenses regarding his self-professed sophistication as a computer expert. Sony further contends that Sarac is subject to unique causation and comparative fault defenses because he made repeated failed attempts to "re-melt" the memory connector pins on his laptop without having it examined by an expert. Sony finally contends that Sarac is subject to a unique spoilation of evidence defense because he destroyed and discarded relevant evidence (i.e., he "re-melted" the memory connector pins, he discarded the original RAM module, and he erased information from his hard drive (Sarac Dep. at 30-32, 48-49)) after he contemplated litigation and again after he filed suit.

Plaintiffs offer specific rebuttals to some of these arguments. For instance, they argue that Sony fraudulently concealed the memory slot defect, therefore the accrual of the statute of limitations was tolled as to Johnson and as to all Class members. Sony responds that such an argument still leads to individual considerations of when Johnson (as well as other Class members) learned of the alleged defect. More generally, Plaintiffs argue that the defenses named by Sony are likely to be shared by many of the prospective Class members, making those defenses more typical than atypical.*fn7 They posit that many members of the proposed Class might face a statute of limitations defense, many might have attempted to solder their ...


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