In Weinstat v. Dentsply International, Inc., ___ Cal.App.4th ___ (Jan. 7, 2010), the Court of Appeal (
Fourth First Appellate District, Division Four) reversed an order decertifying UCL and breach of warranty claims.
A group of dentists sued the manufacturer of an "ultrasonic scaler," which is a device used to clean teeth. According to the manufacturer, the device was also safe and appropriate for use as an irrigant/coolant during oral surgery. Slip op. at 1-3, passim. In fact, however, the device was unsafe for surgical use because it could not be adequately sterilized. Id. at 4.
Initially, the trial court granted class certification of the plaintiffs' UCL and breach of warranty claims. Id. at 5. After the Pfizer decision was handed down in 2006, however, the defendant moved to decertify the classes. Pfizer held -- erroneously, as it turned out -- that after Prop. 64, each class member would have to establish standing by proving that he or she individually relied on the defendant's misrepresentations. The trial court followed Pfizer in decertifying the UCL claim, and for good measure, reconsidered the breach of warranty claim and decertified that claim as well. Id. at 5-6.
The Court of Appeal reversed the decertification order:
Here it is abundantly clear that the trial court incorrectly believed that each class member must establish standing, thereby requiring the court to delve into individual proof of material[ity], reliance and resulting damage. Tobacco II has dispatched that reasoning and therefore reversal is appropriate.
Id. at 9. And that was essentially the end of the analysis.
Notably, unlike the court in Cohen, the Weinstat court considered it wholly unnecessary to address whether individualized reliance issues might impact the commonality element of class certification. Instead, pursuant to Tobacco II, the court simply reversed the decertification order and remanded for redetermination of a single question: "whether the named representatives can meet the UCL standing requirements announced in Tobacco II and if not, whether amendment should be permitted." Id. The Supreme Court did exactly the same thing in Tobacco II itself. In re Tobacco II Cases, 46 Cal.4th 298, 306 (2009).
In other words, Weinstat correctly followed Tobacco II as it was bound to do. Cohen misinterpreted Tobacco II and reached the wrong result.
The opinion also includes a lengthy footnote further interpreting Tobacco II and confirming that, even after Prop. 64, the substantive liability standard in a UCL "fraudulent" prong case is whether "the representations or nondisclosures in question would likely be misleading to a reasonable consumer. The question of materiality, in turn, is whether a reasonable person would attach importance to the misrepresentation or nondisclosure in deciding how to proceed in the particular transaction -- in other words, would a reasonable dentist attach importance to Dentsply's claim that the [device] was safe for use in surgery." Slip op. at 8 n.8 (citation omitted).
Next, the Court of Appeal turned to the breach of warranty claim, and held that that claim should not have been decertified, either.
As a procedural matter, the Court held that a decertification motion may be granted only upon proof of changed circumstances, such as a change in law or newly-discovered facts. Slip op. at 11-12. Because the defendant had presented none with respect to the warranty claim, the trial court had no power to decertify that claim:
In the case at hand, Dentsply’s motion for decertification was accompanied by changed circumstances, most notably the Pfizer decision. However, this circumstance only pertained to the UCL cause of action. Nevertheless, the trial court went on to address Dentsply’s reassertions as to why the breach of warranty class should be decertified as well. Decertifying one theory should not sanction decertifying another absent some commonality with the changed circumstance or some other situation justifying reconsideration. Here there was none.Id. at 12.
Then, the Court held that, "even if the trial court correctly reconsidered its certification of the breach of warranty class, its substantive decision was wrong." Id. In an interesting and lengthy discussion, the Court determined that "reliance plays no role" in a claim for breach of express warranty. Id. at 12-17. And even if it did, none of the variations in the wording of defendants' misrepresentations would defeat certification. Id. at 17-21. "[T]he finding that the [misrepresentations] were not uniform does not imply that the variations were material to the claims ...." Id. at 19. On the most material question -- "biofilm infection risk" -- defendants "were silent." Id. (Here, the Weinstat court departs from Kaldenbach.) And finally, the defendant's hypothetical defenses to the warranty claim (specifically, its right to present "clear affirmative proof" that the misrepresentations in question did not go "to the essence of the agreement") could not defeat the predominance finding. Id. at 21-23.
Many thanks to everyone who wrote to alert me to this new decision.