In an opinion published yesterday, the Court of Appeal (Fourth Appellate District, Division One) reversed a trial court order denying class certification with directions to grant class certification. Lewis v. Robinson Ford Sales, Inc., ___ Cal.App.4th ___ (Sept. 28, 2007) (pub. ord. Oct. 24, 2007). The underlying case involved the treatment and disclosure of negative equity financing under the Automobile Sales Finance Act (Civ. Code §§2981 et seq.), and included UCL and CLRA claims. Here are a few highlights from the opinion.
Regarding whether UCL claims may be certified for class treatment:
In Feitelberg v. Credit Suisse First Boston, LLC (2005) 134 Cal.App.4th 997, 1015, the court clarified that a UCL claim may be properly subject to treatment as a class action " 'when the statutory requirements of section 382 of the Code of Civil Procedure are met.' [Citation.] That authority is now explicit in the amended statute, which authorizes the pursuit of 'representative claims or relief on behalf of others' provided that the claimant 'complies with Section 382 of the Code of Civil Procedure . . . . ' " (Ibid. [of the three varieties of unfair competition established by section 17200, plaintiff mainly asserts the unlawful prong, based on the other alleged statutory violations].)
Slip op. at 12.
Regarding the ascertainability prong of class certification:
Here, the trial court's ruling focused on the ascertainable class issue, by apparently giving undue credit to the defense argument that since various customers had engaged in individual negotiations, regarding the purchase price and trade-in value, individual fraud issues must be predominant, along with punitive damages questions. To the extent the trial court was concerned with punitive damages, that reasoning could only apply to the CLRA claim (§§ 1780, subd. (a)(2), 1781, subd. (a)), and would have no application to the ASFA or UCL theories. In any case, those were not appropriate considerations for determining ascertainability of the class regarding the issues raised on statutory disclosure standards. Rather, to determine the identity of potential class members, the court will look to whether there are any objective criteria to describe them and whether they can be found without unreasonable expense or effort through business or official records. (Daar v. Yellow Cab Co. (1967) 67 Cal.2d 695, 706; Rose v. City of Hayward (1981) 126 Cal.App.3d 926, 932.)
Id. at 13.
Regarding the difference between fraud claims and CLRA and UCL claims:
Contrary to the apparent view of the trial court, plaintiff is not seeking to prove common law fraud in the individual transactions. (See Massachusetts Mutual Life Ins. Co. v. Superior Court (2002) 97 Cal.App.4th 1282, 1292 [CRLA claims do not require individualized proof of causation of injury from a deceptive practice].)
Likewise, any related UCL allegations are not dependent on a finding of separate instances of fraud, because the business transactions here could still qualify as unlawful or likely to deceive the public, through any proven violations of the ASFA. (Bus. & Prof. Code, § 17200.)
Id. at 15 (emphasis added).
Finally, the opinion has this interesting discussion of the treatment of punitive damages claims at the class certification stage:
Regarding the possibility of punitive damages awards under CRLA, it was premature for the trial court to consider that issue with respect to class certification, because the merits of the statutory claims had not yet been resolved. (§§ 1780, subd. (a)(2), 1781, subd. (a).) Also, the fact that punitive damages are pled will not alone bar class certification. (Richmond v. Dart Industries, Inc. (1981) 29 Cal.3d 462, 477.) Even though defendant was denying the existence of any fraudulent intent, those equitable considerations are not dispositive of the statutory claims at the class certification stage of the proceedings. (See Cortez v. Purolator Air Filtration Products Co. (2000) 23 Cal.4th 163, 179 "[L]egal and factual issues that go to remedies simply cannot outweigh the common issues related to liability," when deciding on a plaintiff's motion for class certification; also see Linder v. Thrifty Oil Co. (2000) 23 Cal.4th 429, 435-436.)
Id. Throughout the opinion, this panel very carefully adhered to the rule that merits questions are not to be decided at the class certification stage.