Knapp v. AT & T Wireless Servs., Inc.

• Decision Date: 10 August 2011
• Docket Number: No. G043744.,G043744.
• Citation: 2011 Daily Journal D.A.R. 7261,124 Cal.Rptr.3d 565,195 Cal.App.4th 932,11 Cal. Daily Op. Serv. 6067
• Court: California Court of Appeals Court of Appeals
• Parties: Julia KNAPP, Plaintiff and Appellant, v. AT & T WIRELESS SERVICES, INC., Defendant and Respondent.

195 Cal.App.4th 932

124 Cal.Rptr.3d 565

11 Cal. Daily Op. Serv. 6067

2011 Daily Journal D.A.R. 7261

Julia KNAPP, Plaintiff and Appellant,

v.AT & T WIRELESS SERVICES, INC., Defendant and Respondent.

No. G043744.

Court of Appeal, Fourth District, Division 3, California.

April 25, 2011.

Rehearing Denied May 20, 2011.

Review Denied Aug. 10, 2011.^*

See Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2010) ¶ 14:11.6 (CACIVP Ch. 14-B); Cal. Jur. 3d, Parties, §§ 42, 52; Cal. Jur. 3d, Consumer and Borrower Protection Laws, § 139; 4 Witkin, Cal. Procedure (5th ed. 2008) Pleading, § 283; Annot., Comment Note. Identity or community of interests essential to class or representative suit (1941) 132 A.L.R. 749.

Franklin & Franklin, J. David Franklin, San Diego; Law Offices of Anthony A. Ferrigno and Anthony A. Ferrigno for Plaintiff and Appellant.

Drinker Biddle & Reath, San Francisco, Michael J. Stortz and Beth O. Arnese for Defendant and Respondent.

OPINION

FYBEL, J.

INTRODUCTION

Plaintiff Julia Knapp, on behalf of herself and all others similarly situated, appeals from the trial court's order denying her motion for class certification as to her claims against defendant AT & T Wireless Services, Inc. (AWS), for violation of the unfair competition law (UCL) (Bus. & Prof.Code, § 17200 et seq.), violation of the Consumers Legal Remedies Act (CLRA) (Civ.Code, § 1750 et seq.), and fraud. Knapp's claims are based on the allegation that AWS's descriptions of its wireless service plans as providing a certain number of minutes each month for a certain rate were misleading in light of AWS's billing practice of rounding up any partially used minutes for a call to the next full minute.

We affirm. Substantial evidence showed AWS did not make uniform representations to proposed class members. Instead, as we discuss in detail post, the evidence showed the determination whether AWS made any misrepresentations or otherwise engaged in any unfair, unlawful, or fraudulent conduct, would necessarily involve the resolution of individualized issues as to each class member. Thus, the trial court did not err in denying Knapp's motion for class certification on the ground common issues of law or fact did not predominate over individual issues.

PROCEDURAL HISTORY

I.Prior Appeals

This is the third time this case has been before us. This case was originally brought against AWS by then-plaintiff Diane Tucker who, in a representative capacity, sought, inter alia, injunctive relief under the UCL. She alleged AWS did not fully disclose the way it computed cellular telephone airtime until after a subscriber had signed a wireless service agreement with AWS. In Tucker v. AT & T Wireless Services, Inc. (Apr. 20, 2005, G034038, 2005 WL 906392 [nonpub. opn.] ), we concluded Tucker lacked standing after the passage of Proposition 64 to pursue her representative claims against AWS under the UCL, vacated an order denying AWS's motion to compel arbitration, and remanded for further proceedings.

Following remand, Tucker moved for leave to amend to substitute a plaintiff with standing, add class allegations, and assert a cause of action under the CLRA. The trial court denied the motion. In Tucker v. AT & T Wireless Services, Inc. (Nov. 28, 2006, G036980, 2006 WL 3412521 [nonpub. opn.] ), we reversed the trial court's judgment, concluding the trial court erred by denying leave to amend to substitute a plaintiff with standing and to add the class allegations. We also remanded with directions for the trial court to consider whether AWS would suffer undue prejudice from the addition of the proposed CLRA cause of action.

II.The Third Amended Complaint

In the third amended complaint (the complaint), Knapp was substituted in as plaintiff in Tucker's place. The complaint alleged Knapp was a subscriber to AWS's wireless telephone service, who along with other subscribers of AWS, allegedly suffered injury because AWS failed to sufficiently disclose its billing practices that the number of usable airtime minutes actually provided to consumers under AWS's various service plans was less than what was represented.¹

The complaint asserted claims against AWS for (1) unlawful business practice in violation of the UCL; (2) unfair business practices in violation of the UCL; (3) fraudulent business practices in violation of the UCL; (4) fraud and deceit; and (5) violation of the CLRA.

III.Motion for Class Certification

Knapp filed a motion seeking to certify the following class: “[A]ll persons who have ever been subscribers under a term contract to the wireless telephone service in California of [AWS] from and after January 1, 1999 until October 1, 2004.” The following is a summary of the evidence presented by the parties in connection with the motion for class certification.

AWS offers a wide range of wireless service plans to customers. It markets its various plans using print media, its Web site, television, and radio. AWS sells its services through direct mailings and at kiosks in malls and other locations. AWS maintains its own stores. Local, regional, and national retailers also use their own advertisements to market AWS's products and services. Customers may subscribe to a service plan at a store (either operated by AWS or by a third party), at a national retail chain store, online, or over the telephone. Retailers utilize their own sales processes and documents provided by retailers to customers “were specific to the retailer.”

Among AWS's offerings is the service plan purchased by Knapp in 2000, which was described as 400 airtime minutes per month for a monthly charge of $39.99. Knapp produced several of AWS's rate plan guides in support of her motion. All but one of the rate plan guides include the disclosure that airtime “is billed in full minute increments with partial minutes rounded up to the next full minute” (the rounding up policy). In each of the six welcome guides that were provided to customers upon receipt of their handset, AWS again disclosed the rounding up policy utilizing essentially the same language quoted ante.

In opposition to the motion for class certification, AWS submitted the declaration of Fred Devereux, who was employed by AWS as a vice-president of sales. In his declaration, Devereux declared AWS's “practice of ‘rounding up’ the last partial minute of use to the next full minute increment is standard in the telecommunications industry across the country. A ‘minute’ is the minimum standard unit of measure in the telecommunications business, and virtually all carriers ‘round up’ partially-used minutes in measuring call duration for billing purposes. This is why [AWS] presented its rate plans as a fixed price ‘per minute’ or package of ‘minutes' instead of seconds or some other unit of measure for time.” He further stated: “Based on my interactions with [AWS] customers, it is my belief that customers understood that [AWS] followed the industry standard and ‘rounded up.’ It has always been my understanding that customers were aware that their bills showed that [AWS] ‘rounded up’ and that consumers understood that the bills included full-minute increments.”

Knapp stated that in 2000, she conducted Internet research into wireless service providers and looked at AWS's Web site. She saw that AWS represented that she could obtain 250 airtime minutes per month for $29.99 or 400 minutes per month for $39.99. She did not see the rounding up policy on the Web site. Two days later, she contacted an AWS sales representative on the telephone to discuss what plan she should purchase and the amount of airtime minutes that would be available. Knapp did not ask the representative whether all monthly airtime minutes were usable because she believed that all airtime minutes she purchased would be usable. She was unaware she would “suffer a loss of use of a substantial number of [her] airtime minutes” due to a billing practice such as the rounding up policy.

Knapp signed up for the 400 airtime minutes per month plan for $39.99 monthly and a handset was shipped to her along with written materials. Knapp did not read the written materials which, according to AWS, would have necessarily included the welcome guide containing the rounding up policy. She had since at least twice renewed service with AWS, although she changed her plan to 250 airtime minutes for $29.99. Knapp stopped being a customer of AWS in October 2004 when it was acquired by Cingular Wireless.

IV.Knapp Appeals from the Trial Court's Denial of the Motion for Class Certification.

After the parties' counsel argued the motion for class certification, the trial court denied the motion on the ground that common issues did not predominate. Knapp appealed.

DISCUSSION

I.General Class Action Principles and Standard of Review

“Code of Civil Procedure section 382 authorizes class actions ‘when the question is one of a common or general interest, of many persons, or when the parties are numerous, and it is impracticable to bring them all before the court....’ The party seeking certification has the burden to establish the existence of both an ascertainable class and a well-defined community of interest among class members. [Citation.] The ‘community of interest’ requirement embodies three factors: (1) predominant common questions of law or fact; (2) class representatives with claims or defenses typical of the class; and (3) class representatives who can adequately represent the class. [Citation.]” ( Sav–On Drug Stores, Inc. v. Superior Court (2004) 34 Cal.4th 319, 326, 17 Cal.Rptr.3d 906, 96 P.3d 194( Sav–On ).)

The question of class certification is essentially procedural and does not involve the legal or factual merits of the action. ( Sav–On, supra, 34 Cal.4th at p. 326, 17 Cal.Rptr.3d 906, 96 P.3d 194.) The ultimate question in ruling on a class certification motion is whether the issues which may be adjudicated as a class, when compared with the issues which must be...