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Nei Contracting and Engineering, Inc. v. Hanson Aggregates Pacific Southwest, Inc.

United States District Court, S.D. California

March 24, 2015

NEI CONTRACTING AND ENGINEERING, INC., Plaintiff,
v.
HANSON AGGREGATES PACIFIC SOUTHWEST, INC., ET AL., Defendants.

ORDER DENYING PLAINTIFF'S MOTION FOR CLASS CERTIFICATION, APPOINTMENT OF CLASS REPRESENTATIVE AND CLASS COUNSEL (ECF NO. 74)

CYNTHIA BASHANT, District Judge.

Presently before the Court is Plaintiff NEI Contracting and Engineering, Inc.'s ("Plaintiff") motion for class certification, appointment of class representative, and class counsel. Also before the Court are the opposition filed by Defendant Hanson Aggregates Pacific Southwest Inc. ("Hanson Pacific") (ECF No. 82), and Plaintiff's reply (ECF No. 86). Having reviewed the papers submitted and heard oral argument from both parties, for the reasons set forth below, the Court DENIES Plaintiff's motion for class certification (ECF No. 74).

I. FACTUAL BACKGROUND

Hanson Pacific, Hanson Aggregates, Inc., and Lehigh Hanson Co. (collectively, "Defendants") "are related companies and are all engaged in the business of providing construction concrete, aggregate, ready mix and related materials to contractors engaged in the construction industry." (SAC ¶ 4.) The "vast majority of Hanson [Pacific]'s customers are commercial companies that place numerous phone orders for Aggregate or Ready-Mix materials each year." (ECF No. 82-1 ¶ 2.) Many of the commercial customers have long-standing business relationships with Hanson Pacific that span many years. ( Id. )

Hanson Pacific receives all orders for construction materials through a dedicated telephone line. (ECF No. 73-3 ¶ 5.) Prior to July 15, 2009, Hanson Pacific utilized a "Voice Print International" ("VPI") system, which created a recording of every call made to or from the Ready Mix Dispatch or Aggregate Dispatch lines. ( Id. at ¶ 10; Mot at p. 4; ECF No. 82-6 ("Barajas Dep.") at 33:12-25.) While using the VPI system, Hanson Pacific used "beep tone generators" on all of its telephones which received calls routed to its Ready Mix Dispatch or Aggregate Dispatch lines, which produced an audible "beep tone" every fifteen seconds during a call to provide notice to callers that the call was being recorded. ( Id. at ¶ 11; ECF No. 88 (Joint Statement of Undisputed Material Fact ("JSUF")) ¶¶ 1, 2.) Plaintiff is a contractor and placed numerous orders with Hanson Pacific for construction materials. (SAC ¶ 4; JSUF ¶ 4; ECF No. 82-1 ¶ 4.) Hanson Pacific located forty-eight recordings from five of the twenty-eight phone numbers provided by Plaintiff. (ECF No. 82-1 ¶ 4.)

On July 15, 2009, Hanson Pacific replaced the VPI system and discontinued its use of the "beep tone generators" and began using "a pre-recorded verbal admonition, " which notified inbound callers that their calls "may be monitored for quality assurance." (JSUF ¶ 5; see also ECF No. 73-3 ¶¶ 13, 14; ECF No. 74-4 at 3-4; ECF No. 74-3 at 6-7; ECF No. 82-1 ¶ 6.) On or about December 23, 2013, Hanson Pacific updated the verbal admonition to state that calls may be "monitored or recorded for quality assurance purposes." (ECF No. 73-3 ¶ 17; ECF No. 74-4 at 4.)

Plaintiff contends that Defendants recorded 210, 688 calls made by putative class members from cellphones during the class period beginning on July 15, 2009 and ending on December 23, 2013. (Mot. at 3; ECF No. 74-9 ("Hansen Decl.") ¶ 5.) These calls were allegedly made from 12, 551 unique cellphone numbers. ( Id.; Hansen Decl. ¶ 5) Therefore, Plaintiff seeks to certify a class of 12, 551 members with 210, 688 claims. ( Id. )

II. LEGAL STANDARD

The class action is "an exception to the usual rule that litigation is conducted by and on behalf of the individual named parties only." Wal-Mart Stores, Inc. v. Dukes, 131 S.Ct. 2541, 2550 (2011) (quoting Califano v. Yamasaki, 442 U.S. 682, 700-01 (1979)). In order to justify departing from that rule, "a class representative must be part of the class and possess the same interest and suffer the same injury' as the class members." Id. (citing E. Tex. Motor Freight Sys., Inc. v. Rodriguez, 431 U.S. 395, 403 (1977)). In this regard, Rule 23 contains two sets of class-certification requirements set forth in Rule 23(a) and (b). United Steel, Paper & Forestry, Rubber, Mfg. Energy, Allied Indus. & Serv. Workers Int'l Union, AFL-CIO, CLC v. ConocoPhillips Co., 593 F.3d 802, 806 (9th Cir. 2010). "A court may certify a class if a plaintiff demonstrates that all of the prerequisites of Rule 23(a) have been met, and that at least one of the requirements of Rule 23(b) have been met." Otsuka v. Polo Ralph Lauren Corp., 251 F.R.D. 439, 443 (N.D. Cal. 2008).

"Rule 23(a) provides four prerequisites that must be satisfied for class certification: (1) the class must be so numerous that joinder of all members is impracticable; (2) questions of law or fact exist that are 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

- 3 - 12cv01685 interests of the class." Id. at 443 (citing Fed.R.Civ.P. 23(a)). "A plaintiff must also establish that one or more of the grounds for maintaining the suit are met under Rule 23(b), including: (1) that there is a risk of substantial prejudice from separate actions; (2) that declaratory or injunctive relief benefitting the class as a whole would be appropriate; or (3) that common questions of law or fact predominate and the class action is superior to other available methods of adjudication." Id. (citing Fed.R.Civ.P. 23(b)). Plaintiff seeks class certification under Rule 23(b)(3).

"Rule 23 does not set forth a mere pleading standard." Wal-Mart Stores, Inc. v. Dukes, 131 S.Ct. 2541, 2551 (2011). Rather, "[a] party seeking class certification must affirmatively demonstrate his compliance with the Rule-that is, he must be prepared to prove that there are in fact sufficiently numerous parties, common questions of law or fact, etc." Id. The Court must engage in a "rigorous analysis, " often requiring some evaluation of the "merits of the plaintiff's underlying claim, " before finding that the prerequisites for certification have been satisfied. Id. "Although some inquiry into the substance of a case may be necessary[, ]... it is improper to advance a decision on the merits to the class certification state." Staton v. Boeing Co., 327 F.3d 938, 954 (9th Cir. 2003) (citations and internal quotation marks omitted).

III. DISCUSSION

Plaintiff brings this putative class action under California Penal Code section 632.7 ("Section 632.7"), which prohibits the intentional recording of a telephone call involving at least one cellular telephone without the consent of all parties to the call.[1] A person injured under the statute may bring a civil action for damages and injunctive relief against the person who committed ...


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