The opinion of the court was delivered by: Hon. Dana M. Sabraw United States District Judge
ORDER (1) GRANTING DEFENDANTS' INDIVIDUAL SUMMARY JUDGMENT MOTIONS; (2) DENYING DEFENDANTS' JOINTLY FILED MOTION FOR SUMMARY JUDGMENT; AND (3) DENYING PLAINTIFFS' MOTIONS FOR CLASS CERTIFICATION AS MOOT [Docs. 220-22, 241, 244, 246, 256-57]
In these consolidated putative class actions, Plaintiffs assert that Defendants -- wireless phone companies and other entities involved with the sale of wireless telecommunication services -- have engaged in the unfair and deceptive practice of charging consumers sales tax on the full retail value of wireless phones that were advertised as "free" or at substantial discounts, in violation of California's Unfair Competition Law ("UCL"), Cal. Bus. & Prof. Code § 17200, et. seq., and False Advertising Law ("FAL"), Cal. Bus. & Prof. Code § 17500, et. seq., and for which Plaintiffs seek injunctive relief under the Consumer Legal Remedies Act ("CLRA"), Cal. Civ. Code § 1770, et. seq.
Presently before the Court are eight motions. Plaintiffs Jennifer Laster, Elizabeth Voorhies, and Andrew Thompson have filed motions seeking to certify the class. (Docs. 220-22.) Defendants Airtouch Cellular, AT&T Mobility LLC ("ATTM"), Go-Wireless, New Cingular Wireless PCS LLC, T-Mobile USA Inc. (T-Mobile), Omnipoint Communications, Inc., Cellco Partnership, and Verizon Wireless, L.L.C. ("Verizon") have filed several summary judgment motions challenging Plaintiffs' standing. (Docs. 241, 246, 256-57.) Defendants also filed a joint motion for summary judgment based upon two California court of appeal decisions, Loeffler v. Target Corp., 173 Cal.App.4th 1229 (2009) and Yabsley v. Cingular Wireless, 176 Cal.App.4th 1156 (2009). (Doc. 244.)
On August 28, 2009, the Court heard argument on the motions. Craig McKenzie Nicholas, Dennis James Stewart, Alex M. Tomasevic, and Sarah Weber appeared for Plaintiffs, while Richard E. Drooyan, James C. Grant, Michele A. Powers, John C. Wynne, and Rose Mary Huelskamap appeared for Defendants. For the reasons set forth below, the Court grants Defendants' individual motions for summary judgment on standing grounds. The Court denies without prejudice Defendants' joint motion for summary judgment, and denies Plaintiffs' motions for class certification as moot.
Defendants are engaged in the business of marketing and selling wireless telecommunications products, including wireless phones, accessories and service. These products often are sold as part of a "bundled" transaction, whereby the consumer receives a free or significantly discounted wireless phone, in exchange for agreeing to a wireless service contract for a specified duration. When Defendants offer the free or substantially discounted phone as part of a bundled transaction, they are required to remit sales taxes to the state based on the full retail value of the phone. Defendants generally collect sales tax reimbursements from consumers on such transactions. Plaintiffs contend this practice is improper because Defendants should not charge sales tax on the full retail value of a phone advertised as "free" or at a substantial discount.
Plaintiff Jennifer Laster purchased a wireless phone and service plan from T-Mobile at one of its retail stores on February 23, 2005. (Second Amended Complaint, "SAC," ¶ 3; Laster Dep., 24:5-15; 47:12-15.) T-Mobile sold Laster her phone for $0.00. (SAC ¶ 3.) Laster paid sales tax reimbursement to T-Mobile in the amount of $28.22 on the transaction. (Id.) This charge was exclusive of Laster's monthly service fees. (Laster Dep., Ex. L2.)
On or about August 5, 2004, Plaintiff Andrew Thompson purchased two wireless phones and entered into a service contract in a bundled transaction from Verizon at one of its retail stores. (SAC ¶¶ 23-24.) One of the wireless phones had a sales price of $79.99 and the other, a sales price of $0.00. (Thompson Dep., 78:4-6, 79:24-25; Ex. B.) The stated retail price of each phone was $179.99. (SAC ¶ 4; Thompson Dep., Ex. B.) Thompson paid sales tax reimbursement to Verizon in the amount of $27.90 on the transaction. (SAC ¶ 4.)
On November 14, 2004, Plaintiff Elizabeth Voorhies purchased a wireless phone and case at a Go Wireless retail store in a bundled transaction with wireless service from ATTM. (SAC ¶ 25.) She paid $13 for the phone and case. (Id.) The stated retail price of the wireless phone was $119.99. (SAC ¶ 5.) Voorhies paid sales tax reimbursement to Go Wireless in the amount of $10.31. (Id.)
Summary judgment is appropriate under Rule 56 of the Federal Rules of Civil Procedure where there is an absence of a genuine issue of material fact and the moving party is entitled to judgment as a matter of law. See Fed. R. Civ. P. 56(c); Celotex Corp. v. Cattrett, 477 U.S. 317, 322 (1986). A fact is material when, under the governing substantive law, it could affect the outcome of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); Freeman v. Arpaio, 125 F.3d 732, 735 (9th Cir. 1997). A dispute about a material fact is genuine if "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson, 477 U.S. at 248.
When making its determination, the court must view all inferences drawn from the underlying facts in the light most favorable to the party opposing the motion. See Matsushita Elec. Indus. Co. Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). "Credibility determinations, the weighing of evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge, [when] he is ruling on a motion for summary judgment." Anderson, 477 U.S. at 255.
Plaintiffs seek certification of their UCL, FAL, and CLRA claims on behalf of the following class: "All persons who purchased a cell phone in California [from Defendants], at a final cost reflecting state sales tax calculated upon an asserted retail value of the phone which exceeded the advertised price." (E.g. Thompson Class Cert. Mot., at 1.) Defendants' individual motions for summary judgment contend that Plaintiffs lack constitutional and statutory standing under the UCL, FAL, and CLRA. Defendants' joint motion for summary judgment contends that Plaintiffs' claims are precluded under applicable state law, and as such, fail as a matter of law. The Court resolves Defendants' motions first because a district court should "defer ruling on the class certification until [it determines] whether the purported class representative can state a claim within the asserted class." Lierboe v. State Farm Mut. Auto. Ins. Co., 350 F.3d 1018, 1023 n.6 (9th Cir. 2003).
A. Loeffler & Yabsley Decisions
After the present motions were fully briefed and argued, the California Supreme Court granted review of Loeffler, 173 Cal. App. 4th at 1229, rev. granted, 216 P.3d 520, and Yabsley, 176 Cal. App. 4th at 1156, rev. granted, 2009 Cal. LEXIS 12221 (2009). Thus, the Court declines to address the issues raised in the supplemental briefing, and ...