The UCL Practitioner

Class certification and expert testimony in California: Apple Inc. v. Superior Court (Shamrell)

On Tuesday, the Court of Appeal (Fourth Appellate District, Division One)  handed down an interesting opinion on expert testimony in the class certification context. 

In Apple Inc. v. Superior Court (Shamrell), ___ Cal.App.5th ___ (Jan. 29, 2018), the defendant objected to the plaintiffs' expert testimony in support of class certification, arguing that the testimony was unreliable and therefore inadmissible under Sargon Enterprises, Inc. v. University of Southern California, 55 Cal.4th 747 (2012).  Apple, slip op. at 6, 8, 13.  The trial court declined to apply Sargon at the class certification stage, and certified the class.  Id. at 15-16.  

The Court of Appeal reversed. holding that the trial court's express refusal to apply Sargon was error:

Sargon applies to expert opinion evidence submitted in connection with a motion for class certification.  A trial court may consider only admissible expert opinion evidence on class certification, and there is only one standard for admissibility of expert opinion evidence in California.  Sargon describes that standard.

....

And, even were we free to disregard Sargon (and we are not), we would conclude that its standards for admissibility apply here.  Although class certification is merely a procedural device, and not a determination on the merits, it has profound consequences for the trial court's management of the litigation and the rights of the parties.  The corrosive effects of improper expert opinion testimony may be felt with substantial force at class certification, just as at summary judgment or at trial.  The trial court's gatekeeping role serves a similar salutary purpose in each of these contexts.

Id. at 1, 22-23. 

One of the trial court's concerns was that if Sargon applied at the certification stage, class certification motions would become "these massive hearings."  Id. at 9.  The Court of Appeal dispelled this concern by explaining:

Sargon's discussion of admissibility is plainly substantive, and nothing in that opinion mandates or even encourages holding such a hearing for every expert, at trial or otherwise.  Whether to hold a hearing remains in the trial court's discretion.  And Sargon's substance is not unduly burdensome for trial courts.  It merely ensures that expert opinion evidence is reasonable, reliable, and logical.

Id. at 24.

Apple is the latest of three recent decisions addressing expert testimony at the certification stage. 

In ABM Industries Overtime Cases, ___ Cal.App.5th ___ (Dec. 11, 2017; pub. ord. Jan. 10, 2018) (discussed in this blog post), the Court of Appeal (First Appellate District, Division Four) cited Sargon, but reversed the trial court's order excluding the opinion testimony of plaintiffs' expert witness.  The Court held that the witness was in fact qualified to offer such opinion testimony, and that "questions regarding the degree of an expert’s knowledge go more to the weight of the evidence presented than to its admissibility."   ABM Industries, slip op. at 13-15 (emphasis in original). 

The other recent decision on expert testimony at the class certification stage did not mention Sargon at all.  Duran v. U.S. Bank Nat'l Assn., ___ Cal.App.5th ___ (Jan. 17, 2018) (First Appellate District, Division One) (also discussed in this blog post).  Presumably, the defendant did not argue that the testimony was inadmissible, but rather that it was insufficient to prove that common questions predominated. 

New opinion addresses UCL "unlawful" and "unfair" prongs: Candelore v. Tinder, Inc.

This case is really more about the Unruh Act than the UCL.  In Candelore v. Tinder, Inc., ___ Cal.App.5th ___ (Jan. 29, 2018), the Court of Appeal (Second Appellate District, Division Three) held that because the complaint adequately alleged a violation of the Unruh Act (namely, age-based price discrimination), the complaint also stated a claim for violation of the UCL's "unlawful" prong.  Slip op. at 20. 

In addition, the complaint adequately alleged an "unfair" prong violation:

[I]n view of our conclusion that Tinder’s alleged discriminatory pricing model violates the public policy embodied in the Unruh Act, the UCL’s “unfair” prong provides an independent basis for relief on the facts alleged. The standard for finding an “unfair” practice in a consumer action is “ ‘intentionally broad, thus allowing courts maximum discretion to prohibit new schemes to defraud. [Citation.] The test of whether a business practice is unfair “involves an examination of [that practice’s] impact on its alleged victim, balanced against the reasons, justifications and motives of the alleged wrongdoer. In brief, the court must weigh the utility of the defendant’s conduct against the gravity of the harm to the alleged victim . . . .  [Citations.]” . . . [A]n “unfair” business practice occurs when that practice “offends an established public policy or when the practice is immoral, unethical, oppressive, unscrupulous or substantially injurious to consumers.” [Citation.]’ ” (Smith v. State Farm Mutual Automobile Ins. Co. (2001) 93 Cal.App.4th 700, 718-719; accord Ticconi v. Blue Shield of California Life & Health Ins. Co. (2008) 160 Cal.App.4th 528, 539.)

Slip op. at 20-21 (emphasis added).  The Court applied the "balancing test" formulation of the "unfair" prong.  See id.

Because I served as appellate counsel for the plaintiff and appellant in this case (along with co-counsel Al Rava), I happen to know that the parties did not contest that the "balancing test" applies.  Hence, this case did not present an opportunity for the Court to consider or resolve the three-way split in authority on the proper formulation of "unfair" conduct.  For more on the three-way split, see these blog posts. 

As for the underlying Unruh Act claim, the San Francisco Chronicle reported yesterday that "Dating service cannot charge older folks more on belief they are wealthier." Earlier this month, Consumer Protection Law360 reported that "Tinder User Says Age Bias Suit Deserves Second Chance" (subscription). 

New opinion expected today on appellate standing: Hernandez v. Restoration Hardware, Inc. (Updated)

Today at 10:00 a.m., the Supreme Court will hand down its opinion in Hernandez v. Restoration Hardware, Inc., No. S233983.   This opinion will address whether an unnamed class member must "intervene in the litigation in order to have standing to appeal" any portion of a class action judgment (in a non-settlement context). See this blog post for more on the case.

When the opinion is posted, it should be available at this link:

• Hernandez v. Restoration Hardware, Inc., ___ Cal.5th ___ (Jan. 29, 2018).  UPDATE: It turns out that the opinion did address the settlement context.  The Court held that in order to have standing to appeal any kind of judgment, even one entered following a settlement, the unnamed class member must have intervened below; merely filing an objection to the settlement is not sufficient. 

By the way, within the past couple of months, something changed in the permalinks to the Court's online dockets at appellatecases.courtinfo.ca.gov. I first noticed it when some of my bookmarks on my web browser were broken.  This means that many of the docket links in my past blog posts are now broken as well.  Those older links will take you to the Court's main docket search page, and you'll have to re-enter the case number or party name to find the docket. 

Ninth Circuit reverses nationwide class action settlement: In re Hyundai and Kia Fuel Economy Litigation

On Tuesday, the Ninth Circuit handed down a lengthy opinion in a UCL and CLRA class action in which it reversed, on a 2-1 vote, the district court's order granting certification of a nationwide settlement class.  In re Hyundai and Kia Fuel Economy Litigation, ___ F.3d ___ (9th Cir. Jan. 23, 2018). 

The opinion extensively analyzes Mazza v. American Honda Motor Co., 666 F.3d 581 (9th Cir. 2012) (discussed in this blog post), in which certification of a similar nationwide class was also reversed.  

I have not yet had a chance to fully absorb the new opinion, but Perry Elizabeth Cooper wrote up an interesting report at bna.com.  I would imagine that a petition for en banc rehearing is in the offing, and it might even be granted.  On the other hand, en banc rehearing was denied in Mazza, which was also decided on a 2-1 vote.

Two new class certification opinions: Duran redux and ABM Industries Overtime Cases

The First Appellate District published two new class certification opinions in the last week.  Both are wage and hour cases.

In ABM Industries Overtime Cases, ___ Cal.App.5th ___ (Dec. 11, 2017; pub. ord. Jan. 10, 2018), Division Four reversed an order denying class certification of meal period, expense reimbursement, and other claims, with directions to certify the class and subclasses.  This opinion has a very interesting discussion of class definitions and the ascertainability element of class certification.  It also addresses the use of expert testimony and "database analysis of timekeeping and payroll records" "as a means to show common practices for purposes of class certification."  Slip op. at 20.

Then, yesterday, Division One handed down a new opinion in the long-running Duran litigation, which is a misclassification case involving an exemption defense (namely, the outside salesperson exemption).  Years ago, class certification was granted and the plaintiffs prevailed at trial.  The defendant appealed.  The lengthy appellate process culminated in the California Supreme Court's 2014 Duran opinion (discussed here), which remanded the case back to the trial court for class certification to be addressed anew.  This time, class certification was denied below, and the Court of Appeal affirmed.  Duran v. U.S. Bank Nat'l Assn., ___ Cal.App.5th ___ (Jan. 17, 2018).  

Like the opinion in ABM Industries, the new Duran opinion also discusses expert testimony, but of a different kind than considered in ABM Industries.  The latter case is addressed in a footnote in Duran (slip op. at 24-25 n. 16).

Happy New Year 2018!

Happy New Year to my lovely, loyal readers!  I hope your holidays were both: (a) wonderful; and (b) less busy than mine were.  Shortly before Christmas, I filed an opening brief on the merits in the California Supreme Court—my second Supreme Court case! (My first one was Brinker.)  Then, after taking a very short break for the holiday, I've been putting in long and heavy hours preparing to meet two other appellate deadlines on back-to-back dates coming up very soon this month. 

Since my last post in early December, some interesting new opinions have come down, and I hope to have time to start covering them in a few weeks.  Meanwhile, please continue to email me with UCL or class action comments or with news on interesting decisions.  I always enjoy hearing from those who take time out of their busy days to read this blog.  It's hard to believe that I first started doing this more than 14 years ago.  During all that time, my best motivation to continue has always been your page views and positive feedback.