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Todd v. Tempur-Sealy International, Inc.

United States District Court, N.D. California

June 30, 2017

ALVIN TODD, ET AL., Plaintiffs,
v.
TEMPUR-SEALY INTERNATIONAL, INC., et al., Defendants.

          ORDER GRANTING MOTION TO SEVER AND TO TRANSFER RE: ECF NO. 291

          JON S. TIGAR United States District Judge.

         Before the Court is Defendants' motion to sever Plaintiffs' claims and to transfer claims of severed Plaintiffs. ECF No. 291. The Court will grant the motion.

         I. BACKGROUND

         Plaintiffs bring this action on their own behalf and on behalf of a putative class of purchasers of Tempur products against Tempur-Sealy International, Inc. and Tempur-Pedic North America, LLC (collectively “Defendants”) for claims arising out of Defendants' marketing and sale of mattresses, pillows, and other bedding products containing Tempur material. Specifically, Plaintiffs allege that Defendants' representations of their Tempur products as “formaldehyde free, ” “free of harmful VOCs, ” “allergen and dustmite resistant, ” “hypoallergenic, ” and with a “completely harmless” odor, are false and misleading. ECF No. 156 (“TAC”) ¶¶ 3(h), 3(m), 3(n), 4. Plaintiffs allege that Defendants knew their products did not conform to these representations because internal testing revealed that Defendants' products off-gassed many VOCs, including formaldehyde, which can cause allergic reactions. Id. ¶ 4. Further, Plaintiffs claim that Defendants were aware of customer complaints about the odor and corresponding physical symptoms such as headache, nausea, asthma, eye and throat irritation, and allergic reactions. Id.

         On September 30, 2016, the Court denied Plaintiffs' motion for class certification. ECF No. 284. The Court concluded that Plaintiffs had satisfied the numerosity, typicality, and adequacy prongs of Federal Rule of Civil Procedure 23(a), but found that Plaintiffs had failed to demonstrate commonality, predominance, [1] and superiority.

         In their class certification motion, Plaintiffs argued that class-wide exposure to Defendants' misrepresentations could be inferred from the “massive advertising and brandbuilding program” and a “tightly controlled” marketing campaign conducted by Defendants. ECF. No. 269; see also Transcript of August 18, 2016 Oral Argument (“Transcript”), ECF No. 282, at 42:16-19. After “review[ing] the complete body of evidence offered by Plaintiffs in support of class certification, [however, ] the Court [found] they ha[d] failed to demonstrate the marketing at issue was sufficiently extensive such that one can infer exposure on a class-wide basis.” ECF No. 284 at 18.

         The Court identified various evidentiary and theoretical problems with Plaintiffs' argument of class-wide exposure. For example, Plaintiffs' most-touted statistic - that Defendants' advertising generated “4.3 billion consumer impressions per month” - in actuality offered little evidentiary support because Plaintiffs did not explain (1) what the definition of an “impression” is; (2) how “impressions” are measured; or (3) whether the period of time that these “impressions” were calculated overlaps with the applicable time period for the class. Id. at 18. Nor did Plaintiffs identify which “impressions” were based on Defendants' alleged health-related misrepresentations, versus other marketing claims. Id. The Court identified similar flaws with Plaintiffs' contention that Defendants produced “300 million pages” of “targeted content (direct mail).” Id.

         Moreover, Plaintiffs' mass exposure argument suffered from two theoretical flaws. First, the Court determined that it was wrong to “assume[] that mattress customers buy a product based on any particular marketing representation that they viewed or heard prior to their purchase. Indeed, many mattress consumers - including, potentially, some of the named Plaintiffs - likely entered a store with no specific idea of the brand or product they wish to buy, and make their purchase based simply on their impressions while shopping.” Id. at 20. Second, because more than 90% of Defendants' products are sold by “over 10, 000” third party retailers, ECF No. 220 at 33, Plaintiffs' needed to “demonstrate that third party retailers actually implemented [Defendant's advertising] campaign by showing Defendants' materials to class members.” ECF No. 284 at 20. Yet Plaintiffs' provided “virtually no evidence” about the conduct of these third parties. Id.

         Due to these flaws, the Court concluded that Plaintiffs had failed to “put forth evidence that would allow an inference of class-wide reliance.” Id. at 21. And without such an inference, “the need to individually decide whether class members had been exposed to the alleged misrepresentations would dominate over other commonly shared issues of law or fact.” Id. The Court also noted that “Plaintiffs premise[d] their misrepresentation by omission and unjust enrichment claims on the same alleged marketing campaign, and ma[d]e the same arguments in relation to class certification.” Id. Therefore, the Court concluded that common issues of fact did not predominate for those claims for the same reason. Id. Finally, because resolving Plaintiffs' claims would require a highly individualized inquiry into each class member's exposure to Defendant's advertising, the Court determined that a “class action would not be a superior mechanism for resolving this dispute.” Id. at 22. The Court then denied Plaintiffs' class certification motion.

         On April 12, 2017, Plaintiffs filed a motion for reconsideration of the Court's order denying class certification. ECF No. 300.[2] Plaintiffs claimed the Court erred in its commonality, predominance, and superiority findings. The Court denied the motion for reconsideration on June 30, 2017. ECF No. 308. Given that ruling, the Court now considers Defendants' motion to sever Plaintiffs' claims and to transfer claims of severed Plaintiffs to the judicial districts in which they reside. ECF No. 291 at 5.

         II. MOTION TO SEVER

         A. Legal Standard

         “If the test for permissive joinder is not satisfied, a court, in its discretion, may sever the misjoined parties.” Coughlin v. Rogers, 130 F.3d 1348, 1350 (9th Cir. 1997). “Under Federal Rule of Civil Procedure 20(a), permissive joinder of plaintiffs ‘is proper if (1) the plaintiffs assert[] a right to relief arising out of the same transaction and occurrence and (2) some question of law or fact common to all the plaintiffs will arise in the action.'” Visendi v. Bank of Am., N.A., 733 F.3d 863, 870 (9th Cir. 2013) (quoting Coleman v. Quaker Oats Co., 232 F.3d 1271, 1296 (9th Cir.2000)); Fed.R.Civ.P. 20(a).

         “Even once these requirements are met, a district court must examine whether permissive joinder would “comport with the principles of fundamental fairness” or would result ...


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