BRITTNI COTTLE-BANKS, an individual, on behalf of herself and all others similarly situated, Plaintiff,
COX COMMUNICATIONS, INC., a Delaware corporation; DOES 1 through 100, inclusive, Defendants.
ORDER DENYING PLAINTIFF'S MOTION FOR CLASS CERTIFICATION AND DENYING PLAINTIFF'S MOTION FOR SPOLIATION SANCTIONS [Dkt. No. 48.]
GONZALO P. CURIEL, District Judge.
Before the Court are Plaintiff's motion for class certification and motion for spoliation sanctions. Defendant filed oppositions and Plaintiff filed replies to these motions. The motions are submitted on the papers without oral argument pursuant to Civil Local Rule 7.1(d)(1). Based on a review of the briefs, supporting documentation and applicable law, the Court DENIES Plaintiff's motion for class certification and DENIES Plaintiff's motion for spoliation sanctions.
On September 25, 2012, a status conference was held before District Judge Moskowitz after the case was transferred back to this Court from the District Court for the Western District of Oklahoma by order of the Judicial Panel on Multidistrict Litigation. (Dkt. No. 31.) In preparation for the status hearing, the parties filed a joint status report as to the procedural history of the case. The Court finds the report helpful as to the background history of the case and recites it below.
Plaintiff Brittni Cottle-Banks filed this putative class action in California state court on September 13, 2010. Defendant Cox removed the case to this Court on October 13, 2010, and petitioned the JPML [Judicial Panel on Multidistrict Litigation] to transfer it to the Western District of Oklahoma as a related action to an MDL proceeding pending in that Court, In re Cox Enterprises, Inc. Set-Top Cable Television Antitrust Litigation, 09-ML-02048-C. The JPML granted Cox's petition and Cottle-Banks was transferred to the Western District of Oklahoma on February 4, 2011.
Plaintiffs in the MDL proceeding allege antitrust claims against Cox. Cottle-Banks, on the other hand, alleges consumer fraud claims against Cox. The transferor court denied the antitrust MDL plaintiffs' motion for certification of a nationwide class. In the wake of that denial, the transferor court issued an order suggesting that the JPML remand Cottle-Banks back to this Court for completion of all remaining pre-trial and trial proceedings, on the grounds that those proceedings could best be determined by this Court. Cottle-Banks thereafter returned to this Court on June 25, 2012.
Cottle-Banks alleges that Cox has violated the negative-option-billing provision of the federal Cable Act by failing to disclose and obtain customers' consent to be charged for monthly rental fees associated with their cable set-top boxes. Cottle-Banks seeks relief for this alleged violation under California's Unfair Competition Law. In addition, Cottle-Banks seeks to certify a California class consisting of "[a]ll persons who, at any time from September 13, 2006, to the present ("Class Period"), paid a rental fee to [Cox] for the use of a cable television converter box and/or remote control device in connection with cable television service they received within the state of California." A motion to dismiss the complaint was granted in July 2011 giving plaintiff an opportunity to amend the complaint, which Cottle-Banks did on July 20, 2011. Defendant again filed a motion to dismiss the complaint which was denied on September 26, 2011, and Cox answered the amended complaint on October 18, 2011, denying all of Cottle-Banks's material allegations and denying that she has a right to recover either individually or on behalf of a class. There are two motions pending before the Court: (1) Cottle-Banks's motion for class certification, and (2) Cottle-Banks's motion for discovery sanctions.
The motion for class certification has been fully briefed since January 11, 2012, but no hearing was held in the transferor court. The motion was briefed using the law of the then forum Court. Plaintiff suggests that she resubmit her papers revised to reflect the law of class certification in a California-only class. Class certification will be governed by the law of the Ninth Circuit, and a resubmission of the briefing will properly focus on the appropriate law where the case will be tried. If the Court agrees with plaintiff, then Cox also requests the right to revise its opposition.
As to the underlying class certification arguments, Cottle-Banks maintains that class certification is appropriate because Cox has a uniform policy or practice of failing to obtain customers' consent to be billed for set-top-box rental charges. Cox disputes this and argues that the evidence shows that its policy is exactly the opposite, namely, to disclose to customers that they will be billed for their set-top-box rentals as part of their cable packages. Cox argues that individual issues will predominate because each class member will have to prove that Cox violated its policy as to them.
The second pending motion is Cottle-Banks's motion for evidence-preclusion order and/or adverse inference charge based on Cox's failure to halt what it refers to as the routine overwriting of its customer call recordings before June 2011. This motion has been fully briefed since March 9, 2012. As with the class certification motion, this motion for sanctions was briefed using the law of the then forum Court. Plaintiff suggests that she resubmit her papers revised to focus on the law of the Ninth Circuit where the case will be tried. Again, if the Court agrees with plaintiff, Cox also requests the right to revise its opposition.
(Dkt. No. 25.)
After the status hearing, the Court denied without prejudice the pending motions for class certification and for evidence-preclusion because the briefing did not focus on the law of the Ninth Circuit and set a new briefing schedule for Plaintiff to refile the motions focusing on the appropriate law. (Dkt. No. 28.) On October 12, 2012, the case was transferred to the undersigned judge. (Dkt. No. 35.)
On November 7, 2012, Plaintiff filed a motion for class certification along with a motion for file documents under seal. (Dkt. Nos 36, 37, 38, 39.) Plaintiff also filed a motion for spoliation sanctions along with a motion to file documents under seal. (Dkt. Nos. 41, 42.) On November 26, 2012, the Court denied Plaintiff's motion to file documents under seal as Plaintiff had not shown good cause to file under seal the entirety of the motions. (Dkt. No. 45.) On December 4, 2012, Plaintiff filed a motion to file briefs in compliance with the Court's order filed on November 26, 2012, which the Court granted. (Dkt. Nos. 48, 59.) Attached to the motion were Plaintiff's redacted motion for class certification and motion for spoliation sanctions. (Dkt. No. 48.)
On December 5, 2012, Defendant filed a redacted opposition to Plaintiff's motion for class certification and a redacted motion for spoliation sanctions. (Dkt. No. 53, 54.) The Court granted Defendant's motion to file under seal certain portions of the opposition. (Dkt. No. 58.) On December 19, 2012, Plaintiff filed her reply to the motion for spoliation sanctions and filed her redacted reply to the motion for class certification. (Dkt. Nos. 65, 66.) The Court granted Plaintiff's motion to file under seal her reply to the motion for class certification. (Dkt. No. 67.) On January 24, 2013, Defendant filed an ex parte motion for leave to file surreply which the Court denied on January 29, 2013. (Dkt. Nos. 72, 75.)
On April 24, 2013, the Court issued an order directing the parties to file supplemental letter briefs. (Dkt. No. 77.) On April 29, 2013, both parties filed their letter briefs. (Dkt. Nos. 78, 79.)
In the amended complaint, Plaintiff alleges one cause of action for unlawful business practices under California Business & Professions Code section 17200, et seq. ("UCL") for a violation of the Communications Act of 1934, 47 U.S.C. § 543(f). (Dkt. No. 48-3, Ex. U.) She contends that the practice of charging customers for converter boxes and/or remotes without first disclosing to them the equipment offered and the prices to be charged and without first obtaining customer's affirmative acceptance of the equipment and prices is a violation of 47 U.S.C. § 543(f). (Id. § 5.)
The amended complaint asserts one UCL claim on behalf of herself and a proposed class defined as:
All persons who, at any time from September 13, 2006, to the present ("Class Period"), paid a rental fee to CCI [Cox] for the use of a cable television converter box and/or remote control device in connection with cable television service they received within the state of California (the Class').
(Id. § 25.)
Defendant provides cable television, Internet, and phone services to consumers in the three California communities of San Diego, Orange County and Santa Barbara and a small portion of Los Angeles County. Customers who order cable television services can order either analog or digital channels. Analog service does not require a set-top box while customers wanting to order digital cable, high-definition programming ("HD"), and the ability to record programming with a digital video recorder ("DVR") require the use of a set-top box. The set-top boxes give customers access to digital cable and other premium cable services. Defendant offers four different types of set-top boxes: (1) a standard-definition box; (2) a standard-definition box with DVR capability; (3) a high-definition box; and (4) a high-definition box with DVR capability. Subscribers pay a monthly fee for the cable services and a separate monthly rental fee for any set-top boxes. These fees range from $5.25 to $5.50 per month for the standard boxes and about $7.25 to $7.50 per monthly for high-definition boxes. Remote controls are included without an extra fee. Customers order cable from Cox by either calling and speaking with a customer service representative ("CSR"), visiting one of Cox's fourteen retail locations in Southern California or ordering services on Cox's website. The set-top boxes can either be installed by a technician for a fee or be self-installed by the customer.
Plaintiff Cottle-Banks states that around July 2006, she ordered cable service by placing a telephone call to Cox and elected to self-install the DVR box. (Dkt. No. 48-3 at 151.) She was mailed a self-installation kit which included a DVR, an additional set-top converter box, along with cables, instructions and two remote control devices. (Id. § 2.) She was not told that Cox would send her an additional set-top converter box and charge her a separately monthly fee for it. (Id.) She and her husband hooked up the DVR and converter box. (Id.) She did not call Cox to ask why she had received the additional set-top box and "assumed that it was supposed to be installed." (Van Dusen Decl., Ex. 17 (Cottle-Banks Dep.) at 21:23-22:8; 23:7-10.) She further assumed the second box was free, even though she knew that the DVR box had a separate monthly charge. ( Id., Ex.17 (Cottle-Banks Dep.) at 23:18-24:9; 24:16-21.) Around February 2007, she moved and canceled cable service. (Dkt. No. 48-3 at 151 § 3.)
Between July 2006 and February 2007, Plaintiff paid her monthly bills electronically to Cox and did not ever download or review her monthly bill. (Id.) Around August 2007, she moved into a house and ordered cable television service by placing a telephone call to Cox. (Id. § 4.) She again chose to "self install" the DVR and remote. (Id.) Again, she was not told that she would receive an additional set-top converter box and be charged a separate monthly fee for it. (Id.) A self-installation kit arrived which included a DVR and an additional set-top converter box along with cables, instructions and two remote control devices. (Id.) Her husband again hooked up the DVR box and the additional converter box. (Id.)
In February 2008, Plaintiff began reviewing her monthly bills in order to find ways to save money and noticed for the first time the rental fee of $5.25 on her monthly cable television bill for the additional converter box and remote. (Id. § 5.) Prior to the assessment of the charge, Cox did not specifically disclose that she would be charged any amount for either the additional converter and remote and never secured a knowing acceptance of the converter box and remote and the prices to be charged for them. (Id.)
A. Legal Standard for Class Certification
Federal Rule of Civil Procedure 23 ("Rule 23") governs the certification of a class. See Fed.R.Civ.P. 23. A plaintiff seeking class certification must affirmatively show the class meets the requirements of Rule 23. Wal-Mart Stores, Inc. v. Dukes , 131 S.Ct. 2541, 2551 (2011). To obtain certification, a plaintiff bears the burden of proving that the class meets all four requirements of Rule 23(a)-numerosity, commonality, typicality, and adequacy. Ellis v. Costco Wholesale Corp. , 657 F.3d 970, 979-80 (9th Cir. 2011). If these prerequisites are met, the court must then decide whether the class action is maintainable under Rule 23(b). The Court exercises discretion in granting or denying a motion for class certification. Staton v. Boeing Co. , 327 F.3d 938, 953 (9th Cir. 2003).
The party seeking to certify a class must demonstrate that it has met all four requirements of Rule 23(a) and at least one of the requirements of Rule 23(b). See Zinser v. Accufix Research Inst., Inc. , 253 F.3d 1180, 1186 (9th Cir. 2011). The moving party must provide allegations and supporting facts to satisfy these requirements. Doninger v. Pacific Northwest Bell, Inc. , 564 F.2d 1304, 1309 (9th Cir. 1977).
The Court is required to perform a "rigorous analysis, " which may require it "to probe behind the pleadings before coming to rest on the certification question." Dukes , 131 S.Ct. at 2551. "[T]he merits of the class members' substantive claims are often highly relevant when determining whether to certify a class. More importantly, it is not correct to say a district court may consider the merits to the extent that they overlap with class certification issues; rather, a district court must consider the merits if they overlap with Rule 23(a) requirements." Ellis , 657 F.3d.at 981. Nonetheless, the district court does not conduct a mini-trial to determine if the class "could actually prevail on the merits of their claims." Id. at 983 n.8; United Steel, Paper & Forestry, Rubber, Mfg. Energy, Allied Indus. & Serv. Workers Int'l Union, AFL-CIO v. ConocoPhillips Co. , 593 F.3d 802, 808 (9th Cir. 2010) (citation omitted) (court may inquire into substance of case to apply the Rule 23 factors, however, "[t]he court may not go so far... as to judge the validity of these claims."). "[I]n determining whether to certify the class, the district court is bound to take the substantive allegations of the complaint as true" but "also is required to consider the nature and range of proof necessary to establish those allegations." In re Coordinated Pretrial Proceedings in Petroleum Prods. Antitrust Litig. , 691 F.2d 1335, 1342 (9th Cir. 1982) (citing Blackie v. Barrack , 524 F.2d 891, 901 n. 7 (9th Cir. 1975)).
The Ninth Circuit has held that district courts are "required to resolve any factual disputes necessary to determine whether there was a common pattern and practice that could affect the class as a whole." Ellis v. Costco Wholesale Corp. , 657 F.3d 970, 983 (9th Cir. 2011). While the Ninth Circuit has not addressed whether Plaintiff must show by a preponderance of the evidence that the proposed class meets the factors of Rule 23, district courts have applied the preponderance of the evidence standard as to the Rule 23 requirements. See Faulk v. Sears Roebuck and Co., 11cv2159-YGR, 2013 WL 1703378, at *4 (N.D. Cal. Apr. 19, 2013) (applying preponderance of the evidence standard on Rule 23 requirements); Sobel v. Hertz Corp., 06cv545-LRH-RAM, 2013 WL 1182209, at *17 (D. Nev. Mar. 21, 2013); Quesada v. Banc of America Inv. Servs., Inc., 11cv1703YGR, 2013 WL 623288, at *4 (N.D. Cal. Feb. 19, 2013); Keegan v. American Honda Motor Co., Inc., 284 F.R.D. 504, 521 (C.D. Cal. June 12, 2012) (noting that Supreme Court and Ninth Circuit case has not determined whether the preponderance standard is used in class certification motions; however court applied preponderance of the evidence standard because it is the general standard of proof used in civil cases). Therefore, this Court will also apply the preponderance of the evidence standard to determine whether Plaintiff has met the requirements under Rule 23.
1. Rule 23(a)(2) - Commonality
Plaintiff asserts that the common question of law and fact is whether Cox's admittedly uniform, classwide practice, undertaken before it charges customers for equipment satisfies 47 U.S.C. § 543(f). Defendant argues that Plaintiff has not established commonality because it had a uniform policy to inform customers about monthly equipment fees.
Under Rule 23(a)(2), Plaintiff must show that "there are questions of law or fact common to the class." Fed.R.Civ.P. 23(a)(2). Commonality requires the plaintiff to demonstrate that the "class members have suffered the same injury.'" Dukes , 131 S.Ct. at 2551. "That common contention... must be of such a nature that it is capable of classwide resolution - which means that determination of its truth or falsity will resolve an issue that is central to the validity of each one of the claims in one stroke." Id . "What matters to class certification... is not the raising of common questions'... but, rather the capacity of a classwide proceeding to generate common answers apt to drive the resolution of ...