The opinion of the court was delivered by: Honorable Barry Ted Moskowitz United States District Judge
Plaintiffs have filed a motion for class certification on their claims for (1) violation of California's "Invention Development Services Contracts" laws, Cal. Bus. & Prof. Code §§ 22370, et seq.; and (2) violation of the California Consumer Legal Remedies Act ("CLRA"), Cal. Civ. Code §§ 1750, et seq. For the reasons discussed below, Plaintiffs' motion for class certification is GRANTED IN PART and DENIED IN PART.
The named plaintiffs ("Plaintiffs") suffered damages as a result of entering into contracts with Defendant Advent Product Development, Inc. ("Advent"). (SAC ¶ 20.) Advent advertised that it offered assistance to prospective inventors in connection with obtaining legal protection for their inventions and marketing the inventions once legal protection had been obtained. (SAC ¶ 20.) Each Plaintiff had an invention and met with an employee representative of Advent to discuss utilizing Advent's services. (SAC ¶ 21.)
Plaintiffs were informed that the standard procedure was for the inventor to enter into a "Phase I" contract, which provided that Advent would conduct an initial patent search and would issue a legal opinion. (SAC ¶ 23.) If the "patent search" showed that the proposed invention was not "covered" by an existing patent and had a good chance of obtaining a patent, the inventor would then be allowed to enter into a "Phase II" contract for further services in connection with applying for a patent and marketing the product. (Id.) The Phase II contract required a separate and much larger payment. (Id.)
Each Plaintiff signed the Phase I contract and paid Advent a sum of $1,190.00. (SAC ¶ 24.) Thereafter, Plaintiffs received a "Legal Protection Report," which recommended that Plaintiffs proceed further with the process. (Id.) Relying on the Legal Protection Report, Plaintiffs were induced into entering into the "Phase II" contract, which obligated each of them to pay Advent a sum of $9,240.00. (SAC ¶ 25.)
Plaintiffs allege that although the Legal Protection Report revealed a small grouping of existing patents that may have impacted Plaintiffs' rights, subsequent investigation by Plaintiffs showed that other patents, which were easily found, were so closely related to Plaintiffs' inventions that patent protection could not have been obtained. (SAC ¶ 27.) Plaintiffs allege that Defendants purposefully failed to disclose pertinent prior patents in an attempt to induce Plaintiffs into entering into the "Phase II" contract and obtain the larger payment. (SAC ¶ 28.)
The SAC asserts a class action claim against Advent for violation of the CLRA, a class action claim against Advent for violation of Cal. Bus. & Prof. Code § 17200 and §§ 22372, 22373, 22374, 22379, 22380, and individual fraud claims.
Plaintiffs move for class certification on their claims for violation of Cal. Bus. & Prof. Code §§ 22370, et seq., and violation of the CLRA. Plaintiffs seek certification of the following class:
All persons who signed 'Phase I' contracts with Advent Product Development, Inc. within the state of California at any time between September 18, 2003 and the date trial commences in this action.
Plaintiffs also seek certification of the following subclass:
All persons who signed 'Phase II' contracts with advent Product Development, Inc. within the state of California at any time between September 18, 2003 and the date trial commences in this action.
For the reasons discussed below, the Court finds that certification of the proposed class and subclass is appropriate as to the Cal. Bus. & Prof. Code claim but is not appropriate as to the CLRA claim.
A. Rule 23(a) Requirements
With respect to the Cal. Bus. & Prof. Code claim, Plaintiffs seek certification under Fed. R. Civ. P. 23. Under Rule 23, the party seeking class certification bears the burden of establishing that each of the four requirements of Rule 23(a) and at least one requirement of Rule 23(b) have been met. Dukes v.Wal-Mart, Inc., 509 F.3d 1168, 1176 (9th Cir. 2007). The requirements of Rule 23(a) are that (1) the class is so numerous that joinder of all members is impracticable; (2) there are questions of law or fact common to the class; (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class; and (4) the representative parties will fairly and adequately protect the interests of the class.
The numerosity requirement "requires examination of the specific facts of each case and imposes no absolute limitations." General Tel. Co. of the Northwest, Inc. v. EEOC, 446 U.S. 318, 330 (1980). Some courts have held that numerosity is presumed where the plaintiff class contains forty or more members. See, e.g., Consolidated Rail Corp. v. Town of Hyde Park, 47 F.3d 473, 483 (2d Cir. 1995).
According to information provided by Advent, there are approximately 1400 individuals who qualify as class members and approximately 700 who qualify as subclass members. (Notice of Lodgement, Ex. 7.) The Court concludes that Plaintiffs have satisfied the numerosity requirement.
Rule 23(a)(2) requires that there be "questions of law and fact common to the class." "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). "The commonality test is qualitative rather than quantitative - one significant issue common to the class may be sufficient to warrant certification." Dukes, 509 F.3d at 1177.
Both common questions of law and fact exist with respect to the Bus. & Prof. Code claim. All of the putative class members entered into a Phase I contract with Advent. The putative subclass members also entered into a Phase II contract. The contracts are forms, and based on a random sampling of contracts, it appears that there is no variation in the contract language. (Sullivan Decl. ¶¶ 12-13.) Plaintiffs allege that all of the contracts fail to include language required by Bus. & Prof. Code ...