In Miller v. Bank of America, N.A., ___ Cal.App.4th ___ (Jan. 25, 2013), the Court of Appeal (First Appellate District, Division Three) affirmed the trial court's order denying class certification of claims involving certain allegely improper bank fees.
This case follows Miller v. Bank of America, NT & SA, 46 Cal.4th 630 (2009) ("Miller I") (discussed in this blog post), in which the Supreme Court affirmed reversal of a $284 million judgment for damages and restitution under the UCL and CLRA. The claims were predicated on Bank of America's deduction of bank fees from accounts containing accountholders' SSI disability proceeds. The Supreme Court found this practice lawful. Slip op. at 2-3.
On remand, the plaintiff sought leave to amend his complaint to assert a revised theory of recovery, which was granted. He then moved for class certification, which was denied. Slip op. at 3-4.
The Court of Appeal affirmed:
Here, the trial court properly denied class certification because Miller failed to define an identifiable class of bank customers whose accounts were debited unlawfully. Miller I is dispositive on this point. .... In short, as the trial court noted, “[t]he proposed description pulls into the class whole categories of legal setoffs.” (Italics added.)
Accordingly, it was not enough for Miller to identify accounts that received exempt funds and were subjected to setoffs for obligations arising in a separate account; he must also be able to show which of those setoffs were in violation of section 864. Despite an extended discovery period, Miller failed to show that any means exist to identify a class of bank customers who had been subjected to unlawful setoffs, a class the trial court reasonably found was likely to be substantially smaller than the proposed class. Indeed, he has not even attempted to show that this can be done. Class certification, therefore, was properly denied.
Slip op. at 5-6, 7 (italics in original; bold added).
This reminds me of the Seventh Circuit's recent opinion, holding (under Rule 23) that class definitions may be considered fatally "overbroad" only if the defendant has shown that "a vast number," "a great many," or "a significant number" of persons are "improperly included." Messner v. Northshore University HealthSystem, 669 F.3d 802, 824-26 (7th Cir. 2012). In Miller II, the defendant argued (apparently convincingly) that the proposed class consisted "primarily" of "accounts as to which the alleged setoff transactions were entirely legal." Miller II, slip op. at 4 (emphasis added).
Miller II also addresses merits deteriminations at the class certification stage (interestingly without mentioning Brinker, in which the Supreme Court discussed that topic at length). Slip op. at 9-10. The opinion also approves requests by plaintiffs for "additional discovery" after the defendant has filed its class certification opposition, if new evidence is needed for the reply. Id. at 10-11. Defendants sometimes argue that plaintiffs may not offer new evidence in reply; Miller II recognizes that in the class certification context, doing so is not only proper but sometimes necessary. See id.