United States District Court, E.D. California
KYLE DEI ROSSI and MARK LINTHICUM, on behalf of themselves and those similarly situated, Plaintiff,
WHIRLPOOL CORPORATION, Defendant.
ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFFS' MOTION FOR CLASS CERTIFICATION
TROY L. NUNLEY, District Judge.
This matter is before the Court pursuant to Plaintiffs Kyle Dei Rossi and Mark Linthicum's ("Plaintiffs") motion seeking class certification. (ECF No. 105.) Defendant Whirlpool ("Defendant") opposes Plaintiffs' motion. (ECF No. 111.) Plaintiffs have filed a reply. (ECF No. 124.) The Court has carefully considered the arguments raised by both parties and for the reasons stated below hereby GRANTS IN PART and DENIES IN PART Plaintiffs' motion.
I. FACTUAL AND PROCEDURAL BACKGROUND
Plaintiffs have brought this claim on behalf of themselves and other similarly situated individuals. (Second Amended Complaint ("SAC"), ECF No. 71 at ¶ 2.) Plaintiffs purchased refrigerators manufactured by Defendant that bear the Energy Star logo. The model numbers for the purchased refrigerators were subsequently determined not to comply with Energy Star requirements and were disqualified from the Energy Star program. Plaintiffs' SAC alleged six causes of action, including: (i) violation of the Magnuson-Moss Waranty Act ("MMWA"); (ii) breach of express warranty; (iii) breach of implied warranty of merchantability; (iv) violation of the Consumers Legal Remedies Act; (v) violations of the Unfair Competition Law; and (vi) violation of the False Advertising Law, Business & Professions Code. (ECF No. 71 at ¶¶ 115-156.) On May 21, 2013, Defendant moved to dismiss Plaintiffs' SAC in its entirety. (ECF No. 72.) The Court granted in part and denied in part Defendant's motion and dismissed Plaintiffs' MMWA claim as well as Plaintiffs' breach of implied warranty of merchantability claim. (Order, ECF No. 81.) Thus, Plaintiffs' claims for the following violations remained: Consumers Legal Remedies Act; Unfair Competition Law; False Advertising Law, Business & Professions Code; and breach of express warranty.
Plaintiffs are seeking class certification of a 32-state and the District of Columbia ("D.C.") class defined as all persons who purchased KitchenAid KSRG25FV** and KSRS25RV** model refrigerators that were mislabeled as Energy Star qualified (collectively "Refrigerators"). (ECF No. 105.) Plaintiffs also seek certification of a subclass defined as all members of the class who purchased the Refrigerators in California. (ECF No. 105.) Defendant opposes Plaintiffs' motion. (ECF No. 111.)
II. LEGAL STANDARD
Before certifying a class, the trial court must conduct a "rigorous analysis" to determine whether the party seeking certification has met the prerequisites of Rule 23. Wal-Mart Stores, Inc. v. Dukes, ___ U.S. ___, 131 S.Ct. 2541, 2551 (2011) (quoting Gen. Telephone Co. of Sw. v. Falcon, 457 U.S. 147, 161 (1982)). "While the trial court has broad discretion to certify a class, its discretion must be exercised within the framework of Rule 23." Zinser v. Accufix Research Inst., Inc., 253 F.3d 1180, 1186, amended by 273 F.3d 1266 (9th Cir. 2001) (citing Doninger v. P. Nw. Bell, Inc., 564 F.2d 1304, 1309 (9th Cir. 1977)); see also Wang v. Chinese Daily News, Inc., 737 F.3d 538, 542-43 (9th Cir. 2013). A court may certify a class if a plaintiff demonstrates that all of the prerequisites of Federal Rule of Civil Procedure 23(a) have been met and that at least one of the requirements of Rule 23(b) have been met. Fed.R.Civ.P. 23; see also Wal-Mart Stores, Inc. v. Dukes, 131 S.Ct. at 2548-49.
Rule 23(a) states that one or more members of a class may sue or be sued as representative parties on behalf of all only if:
(1) the class is so numerous that joinder of all members is impracticable [the "numerosity" requirement]; (2) there are questions of law or fact common to the class [the "commonality" requirement]; (3) the claims or defenses of representative parties are typical of the claims or defenses of the class [the "typicality" requirement]; and (4) the representative parties will fairly and adequately protect the interests of the class [the "adequacy of representation" requirement].
In addition, Rule 23(b) requires a plaintiff to establish one of the following: (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. Fed.R.Civ.P. 23(b).
In Defendant's opposition, Defendant argues that aside from not meeting Rule 23's requirements, Plaintiffs also lack standing. (ECF No. 111 at 14.) Thus, before addressing Rule 23's requirements, the Court addresses Defendant's standing argument.
Defendant asserts that named plaintiffs who represent a class must allege and show that they personally have been injured, and that in this case "there is no evidence that Plaintiffs bought a mislabeled' Refrigerator." (ECF No. 111 at 14-15.) The Court finds Defendant's statements disingenuous. Plaintiffs have provided proof that they purchased the Refrigerators and that the Refrigerators were labeled with the energy star logo. As admitted by Defendant, the Department of Energy ("DOE") tested the exact refrigerator models Plaintiffs purchased and found they did not comply with the Energy Star requirements. ( See Fisher Decl., Exs. 22-23.) There is no evidence that the Refrigerators purchased by Plaintiffs vary from those tested by DOE. Defendant also offers a theory that the Refrigerators were compliant with the Energy Star program at the time that they were sold, but somehow fell out of compliance. However, Defendant fails to present any evidence in support of this assertion. Thus, the Court finds these arguments unavailing on the issue of Plaintiffs' standing. The Court also finds Defendant's argument-that the proposed classes are unascertainable-flawed. Defendant contends that "it is impossible to determine whether any Refrigerator was Energy Star-compliant when sold (and thus, whether it was mislabeled')." (ECF No. 111 at 16.) The proposed class members all purchased the same models of refrigerators that were built to the same specifications. To accept Defendant's assertion that this Court would need to test each refrigerator would be unreasonable and would support a finding that class certification is not appropriate for litigation involving consumer products. The Court declines Defendant's invitation to do so.
Defendant also argues that "Plaintiff Dei Rossi and other KRSG owners lack standing for the additional reason that they suffered no injury in fact, even assuming that they purchased Refrigerators that would not have met Energy Star requirements when new." (ECF No. 111 at 16.) Defendants assert that this is because the KSRG was disqualified for mere technical non-compliance and that KSRG owners who used their Refrigerator at the factory preset "mid-mid" temperature received exactly what they bargained for-a refrigerator that consumed energy consistent with DOE testing requirements for Energy Star at that setting. (ECF No. 111 at 16.) The Court is not convinced that a consumer who purchased a product, at a premium, based on advertised specifications has not suffered an economic injury when that product fails to meet the advertised specifications. See Pirozzi v. Apple Inc., 913 F.Supp.2d 840, 846-47 (N.D. Cal. 2012) ("Overpaying for goods or purchasing goods a person otherwise would not have purchased based upon alleged misrepresentations by the manufacturer would satisfy the injury-in-fact and causation requirements for Article III standing.") Defendant's argument is relevant to the amount of damages suffered and thus is welcome at trial, but is irrelevant for the purpose it is offered for, i.e. determining class certification. The Court finds that Plaintiffs have alleged sufficient facts to show they have personally been injured. Having determined that the Plaintiffs do have standing, the Court now turns to the Rule 23 factors.
B. Rule 23(a)
To meet the numerosity requirement of Rule 23(a), a class must be "so numerous that joinder of all members is impracticable." Rule 23(a)(1); see also Consolidated Rail Corp. v. Town of Hyde Park, 47 F.3d 473, 483 (2d Cir. 1995) ("numerosity is presumed at a level of 40 members"); Andrews Farms v. Calcot, Ltd., No. CV-F-07-0464 LJO DLB, 2009 WL 1211374, at *3 (E.D. Cal. May 1, 2009); see also William B. Rubenstein, et al., Newberg on Class Actions, § 3.12 at 198 (5th ed. 2011). Plaintiffs have put forth evidence that thousands of people purchased the two Refrigerators at issue. ( See ECF No. 105 at 17-18; Fisher Ex. 29 ("Approximately 12, 000... refrigerators were produced" that were "not Energy Star qualified."), Ex. 26 ("Right now, looks like the population is around 12K."), Ex. 24 ("2, 000 units of KSRG25[F]VMF were manufactured annually..."), Exh. 30 (showing that thousands of KSRS25RV** models were produced). Plaintiffs' proposed class dwarfs the minimally accepted number for class numerosity and would make joinder of all the class members impracticable. Therefore, the proposed classes meet the numerosity requirement.
"Commonality requires the plaintiff to demonstrate that the class members have suffered the same injury. This does not mean merely that they have all suffered a violation of the same provision of law." Wal-Mart Stores, Inc. v. Dukes, 131 S.Ct. 2541, 2551 (2011). The "claims must depend on a common contention" that 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. All questions of fact and law need not be common to satisfy the rule. Rodriguez v. Hayes, 591 F.3d 1105, 1122 (9th Cir. 2009). Generally, courts have approached the issue loosely, finding common questions of law to be at a high level of generality. See Amchem Products, Inc. v. Windsor, 521 U.S. 591, 625 (1997) (noting that the commonality requirement under Rule 23(a) is less stringent than the predominance requirement under Rule 23(b)(3)).
Plaintiffs assert that common questions of fact predominate this case and thus certification under Rule 23(a)(2) is appropriate because Plaintiffs' and the class members' claims each arise from the same misrepresentations made by Defendant that the products were Energy Star certified. (ECF No. 105 at 18.) Specifically, Plaintiffs assert that the determination of the following common questions of fact will resolve issues central to the validity of Plaintiffs' and the class members' claims in a single stroke: "(1) whether Defendant labeled and advertised the Refrigerators as Energy Star qualified; (2) whether the Refrigerators met the standards of energy efficiency established by the Energy Star program; (3) whether the Energy Star mark and advertising were material to class members' decision to purchase the Refrigerators; and (4) whether class members were damaged by purchasing Refrigerators that were not Energy Star qualified." (ECF No. 105 at 18.) In opposition, Defendant contends that different Refrigerators may perform differently and thus Plaintiffs cannot demonstrate that the class members have suffered the same injury. (ECF No. 111 at 17.) Defendant also asserts that there is not commonality in the class because Plaintiffs cannot show "whether the Energy Star mark was material to a given class member's buying decision." (ECF No. 111 at 17.)
The Court is not convinced by Defendant's arguments. First, if Defendant shows that the Refrigerators (that were all made with the same parts and specifications) perform differently and that such performance affects their energy efficiency, the Court would consider such in assessing damages. However, at this point, Defendants have not presented this Court with any evidence that would lead this Court to believe that the DOE's finding-that the Refrigerators used more energy than they would have had they met the Energy Star specifications-was incorrect or based on a small portion of Refrigerators that are not a fair representation of those in the marketplace. Second, as to Defendant's argument concerning whether the Energy Star mark was material to a given class member's buying decision, Plaintiffs have presented sufficient evidence, including consumer surveys and Defendant's own public statements, demonstrating that the Energy Star mark is material.
The Court finds that the same questions of fact predominate the proposed class's claims, i.e. (1) whether Defendant labeled and advertised the Refrigerators as Energy Star qualified; (2) whether the Refrigerators met the standards of energy efficiency established by the Energy Star program; (3) whether the Energy Star mark and advertising were material to class members' decision to purchase the Refrigerators; and (4) whether class members were damaged by purchasing Refrigerators that were not ...