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Stathakos v. Columbia Sportswear Co.

United States District Court, N.D. California

May 11, 2017

Jeanne Stathakos, et al., Plaintiffs,
Columbia Sportswear Company, et al., Defendants.



         Plaintiffs Jeanne Stathakos and Nicolas Stathakos bring this putative class action against defendants Columbia Sportswear Company and Columbia Sportswear USA Corporation (collectively, “Columbia”) for alleged use of deceptive and misleading labeling and marketing of merchandise in its company-owned Columbia outlet stores. Plaintiffs bring five causes of action: three under each prong of the Unfair Competition Law, California Business & Professions Code §§ 17200, et seq. (“UCL”) for (i) unlawful, (ii) unfair, and (iii) fraudulent business practices; the fourth for violation of the False Advertising Law, California Business & Professions Code §§ 17500, et seq., (the “FAL”); and the fifth for violation of the Consumers Legal Remedies Act, California Civil Code §§ 1750, et seq. (the “CLRA”).

         Currently before the Court are the following motions: defendants' motions to exclude plaintiffs' experts, namely Ms. Gabriele Goldaper and Dr. Larry Compeau; defendants' motion for summary judgment; and plaintiffs' motion to certify a class under Federal Rule of Civil Procedure 23(b)(2) or 23(b)(3). Specifically, plaintiffs seek to certify the following class under Rule 23(b)(2) or Rule 23(b)(3): “All consumers who have purchased an Outlet SMU Build at a Columbia Outlet store in the State of California since July 1, 2014, through the conclusion of this action.”

         Having carefully reviewed the papers and evidence submitted on the above motions and oral arguments at the hearing held on April 25, 2017, and for the reasons set forth more fully below, the Court Orders as follows: The Court Denies defendants' motion to exclude Ms. Goldaper. The Court Grants in Part defendants' motion to exclude certain paragraphs of Dr. Compeau's report as set forth herein. The Court Grants in Part defendants' motion for summary judgment with regard to plaintiffs' proposed models for monetary relief, but Denies such motion in all other respects. The Court Grants in Part plaintiffs' motion for class certification and conditionally certifies a Rule 23(b)(2) class as set forth below.

         I. Background

         Plaintiffs bring this UCL, FAL, and CLRA putative class action generally alleging that defendants utilize deceptive practices with regard to their use of price tags for certain products at their outlets. Specifically, plaintiffs allege that defendants' use of “reference prices” on merchandise tags at their outlet stores is deceptive because it leads consumers to believe that such merchandise was formerly sold at that price when the truth was to the contrary. Relevant to this action, defendants sold two general categories of garments: (i) “Inline Styles, ” which were regular products produced for sale at any of defendants' stores, wholesale partners, or online; and (ii) “Outlet Special Makeup (“SMU”) Builds, ” which were designed specifically for, and sold only at, defendants' outlet stores. This case relates only to the sales of defendants' Outlet SMU Builds.

         The following background is relevant to the instant motions:

         Defendants sell their products primarily through four channels: Columbia's Inline retail stores, website, wholesale partners, and outlet stores. Prior to 2014, Columbia used the outlet stores to sell styles that were previously sold at Inline retail stores, and the price tags reflected both the higher price at which it previously sold Inline and the lower price at which it could be purchased at the outlet. (Dkt. No. 61-22 at 7, Defendants' Interrogatory #3.)

         At the beginning of the class period in July 2014, defendants started selling Outlet SMU Builds, which it describes as “styles based off an in-line style, with slight aesthetic modifications.” (Id.) Importantly, Outlet SMU Builds are sold only at the outlet stores. (Id.) Like the Inline Styles sold at the outlet stores, the Outlet SMU Builds also bore a price tag presenting two prices. The higher price tag represented the price at which the “corresponding inline style sold for” whereas the lower price was the “price at which the item could be purchased at the outlet (absent a special sale at the outlet).” (Id.) The Outlet SMU Builds, however, were never sold anywhere other than outlet stores, and never sold for the higher reference price. (See Bui Dep. Tr. 103:18-20, 123:8-124:12.) The following figures represent the different price tags for inline styles, Outlet SMU Builds, and Inline styles sold at outlets, respectively:

         (IMAGE OMITTED)

         Relevant to this litigation, plaintiffs purchased eight Outlet SMU Builds in seven different styles. Specifically, the following chart summarizes such purchases:[1]

Item No.

SMU Style No.


Purchase Date

Ref. Price

Outlet Price

Purchase Price



Mr. Village Jacket (Gray)






XL 5077

Wildflower Woodlands Dress (Fuschia)





3(a) 3(b)

XL4712 XL4712

Sunset Hill Shorts (Beige)


7/8/15 7/26/15

$30 $30

$24.90 $24.90

$11.98 $S.98



Hopewell Bay Long Sleeve Shirt (Gray)







Cascade Trail Jacket (Green)







Moring Light Hooded Jacket fWiite)







Cool Camper II Polo (Purple)





         Defendants assert that since the beginning of the class period, they have produced approximately 580 Outlet SMU Builds. Defendants continue to utilize the same price tag practices with regard to the same.

         II. Motions to Exclude Expert Reports

         A. Legal Framework

         Rule 702 permits opinion testimony by an expert as long as the witness is qualified and their opinion is relevant and reliable. Fed.R.Evid. 702. An expert witness may be qualified by “knowledge, skill, experience, training, or education.” Fed.R.Evid. 702. The admissibility of an expert opinion requires a three-step analysis:

The admissibility of expert testimony, Rule 702, requires that the trial court make several preliminary determinations, Rule 104(a). The trial court must decide whether the witness called is properly qualified to give the testimony sought. A witness may be qualified as an expert on the basis of either knowledge, skill, experience, training, or education or a combination thereof, Rule 702. The trial court must further determine that the testimony of the expert witness, in the form of an opinion or otherwise, will assist the trier of fact, i.e., be helpful, to understand the evidence or to determine a fact in issue, Rule 702(a). Finally the trial court must determine that as actually applied in the matter at hand, Rule 702(d), to facts, data, or opinions sufficiently established to exist, Rule 702(b), including facts, data, or opinions reasonably relied upon under Rule 703, sufficient assurances of trustworthiness are present that the expert witness' explanative theory produced a correct result to warrant jury acceptance, i.e., a product of reliable principles and methods, Rule 702(c).

         Michael H. Graham, 5 Handbook of Fed. Evid. § 702:1 (7th ed.) (footnotes omitted).

         Under Rule 703, expert opinion may be based on three possible sources: firsthand knowledge; admitted evidence; and facts or data not otherwise admitted, if they are the kind of information on which experts in the particular field reasonably would rely in forming opinions on the subject. See Victor J. Gold, 29 Fed. Prac. & Proc. Evid. § 6274 (2d ed.) At the class certification stage, courts analyze challenges to expert testimony under the standards set forth in Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993). See Ellis v. Costco Wholesale Corp., 657 F.3d 970, 982 (9th Cir. 2011). “[A]t this early stage, robust gatekeeping of expert evidence is not required; rather, the court should ask only if expert evidence is useful in evaluating whether class certification requirements have been met.” Culley v. Lincare Inc., No. 15-CV-00081-MCE-CMK, 2016 WL 4208567, at *1 (E.D. Cal. Aug. 10, 2016) (quoting Tait v. BSH Home Appliances Corp., 289 F.R.D. 466, 492-93 (C.D. Cal. 2012). The trial judge has discretion to determine reasonable measures of reliability. Kumho Tire Co. v. Carmichael, 526 U.S. 137, 153 (1999).

         Ultimately, the proponent of expert testimony has the burden of proving admissibility in accordance with Rule 702. Fed.R.Evid. 702, Advisory Committee Notes (2000 amendments). An expert should be permitted to testify if the proponent demonstrates that: (i) the expert is qualified; (ii) the evidence is relevant to the suit; and (iii) the evidence is reliable. See Thompson v. Whirlpool Corp., No. C06-1804-JCC, 2008 WL 2063549, at *3 (W.D. Wash. May 13, 2008) (citing Daubert, 509 U.S. at 589-90).

         B. Motion to Exclude Ms. Goldaper

         Plaintiffs have proffered Ms. Goldaper to opine on the similarities between the Outlet SMU Builds and their purported Inline counterparts. Ms. Goldaper reviewed thirty-five distinct garments, and reached the following four conclusions: (i) seven Outlet SMU Builds had major material differences from their Inline counterparts; (ii) nine Outlet SMU Builds had modest differences from their Inline counterparts; (iii) two Outlet SMU Builds were counterparts of each other; and (iv) one of the Outlet SMU Builds had no counterpart whatsoever.

         Defendants raise two grounds upon which they argue Ms. Goldaper's expert declaration should be excluded. First, defendants argue that Ms. Goldaper's opinions and methodology are unreliable. Second, defendants argue that, in the alternative, her opinions are irrelevant. Defendants do not persuade:


         Defendants argue that Ms. Goldaper did not employ any particular set standard or methodology in reaching her conclusions about the similarities between different garments at issue in this litigation. (See Goldaper Dep. Tr. 56:90-60:14.) Additionally, Goldaper herself stated that she could not identify anyone else in the industry who could have conducted the same analysis. (Id. Tr. 56:9-60:14, 68:7-22.) Thus, defendants contend, Goldaper's conclusions are only her personal opinions, and her method results in a high rate of error. Defendants' arguments ignore the actual analysis conducted by Ms. Goldaper, and the expertise that she brings to bear on such analysis.

         Ms. Goldaper has been in the fashion industry for forty-five years, taught as a part-time faculty member at the Fashion Institute of Design & Merchandising for approximately thirty years, served as an apparel expert for the United States Agency for International Development, and offered expert opinions comparing garments for purposes of copyright disputes. (Goldaper Rpt. ¶¶ 3-8.) Given her expertise, Ms. Goldaper compared the functional and aesthetic components of the Outlet SMU Builds and their purported Inline counterparts, and on the basis of this comparison, identified whether the differences were “major” or “modest” or whether there were no Inline counterparts. Ms. Goldaper testified that, although the descriptions she ultimately employed-“major” or “modest”-may not be standard throughout the industry, the method she used to compare garments was an “accepted practice.” (Id. at 58:2-9.) Based on her extensive experience in the fashion industry, the Court finds Ms. Goldaper has sufficient expertise to opine on the degree of similarity between the different garments.


         The standard for relevance is not high. Federal Rule of Evidence 40 defines as relevant evidence which has any tendency to make the existence of a fact that is of consequence to the determination of the action more probable or less probable than it would be without such evidence. This rule simply requires that the evidence “logically advance a material aspect of the party's case.” Estate of Barabin v. AstenJohnson, Inc., 740 F.3d 457, 463 (9th Cir. 2014) (internal quotations and citation omitted).

         Defendants contend the case centers only on two issues, and that Ms. Goldaper did not opine on either, namely: (i) whether each Outlet SMU Build is similar to an Inline counterpart style and (ii) what the difference is between the value of the garments plaintiffs' purchased and the prices they paid. The Court disagrees. Although Ms. Goldaper admits that she did not opine on the value of any particular Outlet SMU Build relative to its purported Inline counterparts, she did not, as defendants argue, concede that she does not opine on the similarities between Outlet SMU Builds and the Inline styles. The following is the exact colloquy cited by defendants: “Q: Were you asked to render an opinion one way or the other about whether a pair of items were similar? A: Specifically if they were similar or not? I was asked to do exactly what it says in No. 13, and I was limited to answering that.” (Goldaper Dep. Tr. 96:7-11.) Paragraph 13 of her opinion reads thus:

As an apparel expert with over 45 years of experience in the fashion industry, I am of the opinion(s) that: None of the outlet-exclusive styles I reviewed were identical to an inline style. Of the 18 total Outlet SMU Builds I examined, 7 have major material differences from their inline counterparts in design, structure, and/or stylistic detail; 9 have modest stylistic differences compared to their inline counterparts; 1 has no inline counterpart but has modest stylistic differences from another Outlet SMU Build that it is based on; and 1 has no counterpart design at all.

(Dkt. No. 61-4 at 6.) Thus, Ms. Goldaper has performed a comparison describing the degree of differences that exist between the Outlet SMU Builds and their Inline counterparts. Defendants themselves have placed such comparison at issue by arguing that all they need show to escape liability is that the Outline SMU Builds were similar enough to their Inline counterparts such that the reference prices used were accurate and valid. Ms. Goldaper's opinion directly addresses such issue, and is therefore relevant.

         Accordingly, the Court Denies defendants' motion to exclude Ms. Goldaper's expert declaration.

         C. Motion to Exclude Dr. Compeau

         Plaintiffs proffer Dr. Compeau as an expert on consumer behavior. Specifically, Dr. Compeau provides the following four opinions: (i) a review of the extant literature demonstrates that consumers are affected and influenced by reference prices; (ii) defendants utilize reference prices extensively; (iii) because the Outlet SMU Builds are never sold anywhere but the outlet stores and never at the reference price, such reference prices are false and suggest to the consumer that they are saving money; and (iv) the reference prices are deceptive and induce consumers to purchase Outlet SMU Builds that they otherwise would not have bought.

         Defendants raise three categories of arguments explaining why the Court should exclude in whole or in part Dr. Compeau's expert report: first, Dr. Compeau's use of meta-analyses is inadmissible; second, in any event, the scientific literature cited by Dr. Compeau does not support his conclusions; and third, certain paragraphs improperly opine on corporate intent or the ultimate questions regarding causation and deception.[2]

         Inadmissibility of Meta-Analysis.

         Defendants seek to exclude Dr. Compeau's report because it reflects no actual expert analysis but instead merely a summary of prior studies. Defendants fail to provide support for such proposition. Courts routinely allow experts to utilize their expertise in analyzing and compiling research in their field developed by others. See, e.g., In re Bextra & Celebrex Mktg. Sales Practices & Prod. Liab. Litig., 524 F.Supp.2d 1166, 1184 (N.D. Cal. 2007). Here, Dr. Compeau analyzes the findings developed over thirty years of peer-reviewed research on reference pricing, and explains how the evidence in this case is consistent with that research. Given Dr. Compeau's experience and qualifications, he is certainly qualified to perform such analysis. The Court thus rejects defendants' argument on this ground.[3]

         Lack of Support for Opinions.

         Defendants next argue that Dr. Compeau's own sources do not support his opinions. First, they contend that many of Dr. Compeau's sources are more than fifteen years old. Second, some of the findings in the articles conflict with Dr. Compeau's opinions. Neither of these arguments, however, addresses the admissibility of Dr. Compeau's opinions, but rather, are pertinent to the weight a fact finder may give to Dr. Compeau's conclusions. That some articles may be outdated or may contradict his opinions does not necessarily render Dr. Compeau's report so unreliable as to militate toward exclusion of his report.

         Improper ...

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