Noel v. Thrifty Payless, Inc.

Decision Date04 December 2017
Docket NumberA143026
Citation226 Cal.Rptr.3d 465,17 Cal.App.5th 1315
CourtCalifornia Court of Appeals Court of Appeals
Parties Diana Nieves NOEL, as Personal Representative, etc., Plaintiff and Appellant, v. THRIFTY PAYLESS, INC., Defendant and Respondent.

Emergent Legal, Emergent and Christopher Wimmer, San Francisco, for Plaintiff and Appellant.

Kelly, Hockel & Klein, Klein, Hockel, Iezza & Patel, Michael D. Early, San Francisco and Mark P. Iezza, Walnut Creek, for Defendant and Respondent.

Streeter, J.Plaintiff James A. Noel bought an inflatable swimming pool at defendants' drugstore that turned out to be much smaller than the pool pictured on the box. He sued defendant Thrifty Payless, Inc. on behalf of himself and similarly situated individuals, alleging defendants violated the Consumers Legal Remedies Act ( Civ. Code, § 1750 et seq. ) (CLRA), Unfair Competition Law ( Bus. & Prof. Code, § 17200 et seq. ) (UCL), and False Advertising Law ( Bus. & Prof. Code, § 17500 ) (FAL) by selling the pool with deceptive advertising to consumers in its California retail stores. When Noel moved to certify the class, the trial court denied his motion on the UCL and FAL causes of action, finding Noel's proposed class—consisting of more than 20,000 potential members—was not ascertainable under Code of Civil Procedure section 382. The court also refused to certify a class on Noel's CLRA cause of action because it determined common questions of law or fact did not predominate over individual questions of reliance and causation. On appeal, Noel claims the court erred by applying incorrect legal standards and abused its discretion by refusing to grant him a continuance so he could more fully develop the facts to support his motion.

We conclude the court did not abuse its discretion or misapply the law in denying class certification. Rather, the underlying problem with the class certification motion appears to be attributable to class counsel's premature filing of the motion without first conducting sufficient discovery to meet its burden of demonstrating there are means of identifying members of the putative class so that they might be notified of the pendency of the litigation. This failing jeopardizes the due process rights of absent class members, and rather than relieve the class representative of the obligation to make such a showing—as Noel's counsel seems to suggest—we affirm the trial court's denial of the class certification motion.

I. BACKGROUND
A. Factual Background

On July 4, 2013, Noel purchased an inflatable Kids Stuff Ready Set Pool (Ready Set Pool) from a Rite Aid1 store in San Rafael, California, with his bank debit card for $59.99. Noel did not retain the receipt of his purchase, but his bank record lists the Rite Aid purchase. Noel based his decision to purchase the Ready Set Pool on a photograph on the pool's packaging, located on all sides of the box, which depicted a group of three adults and two children sitting and playing in the pool. Noel assumed the pool would be large enough to comfortably fit a group of equivalent size. The box also prominently displayed the pool's dimensions: "8FT X 25IN." Noel does not contend the dimensions were inaccurate.

Once Noel inflated and filled his pool, he noticed his pool was "materially smaller" than the Ready Set Pool shown on the packaging. Rather than fitting two adults and three children as pictured on the box, Noel's pool was capable of fitting only one adult and four small children. The photographs in the record and the briefs show a marked difference in size between the pool as set up by Noel and the photo on the box.

B. Procedural Background

On November 18, 2013, Noel filed this class action seeking restitution for all consumers who purchased a Ready Set Pool from a Rite Aid store located in California during the four years prior to that date. Following Rite Aid's unsuccessful demurrer to the complaint, Noel moved for class certification on May 12, 2014, apparently after having taken limited discovery,2 with a hearing date of June 13, 2014. The motion was filed by Noel's then counsel, Randolph Gaw of The Gaw Group in San Francisco. Gaw had been recommended to Noel by his son-in-law, Mark Poe, also an attorney. Poe and Gaw evidently had been classmates in law school. While Noel's action was pending, Poe went into law practice with Gaw, which prompted Rite Aid to question the adequacy of class counsel, since Poe had been present when Noel discovered the size differential in the pool and had been named in Noel's discovery responses as a potential percipient witness at trial. (See Apple Computer, Inc. v. Superior Court (2005) 126 Cal.App.4th 1253, 1264–1279, 24 Cal.Rptr.3d 818.) The parties' counsel stipulated to continue the hearing on the class certification motion until August 22, 2014, giving both parties the opportunity to brief the issue of counsel's adequacy.

On August 15, 2014, Christopher Wimmer of the Emergent Legal firm in San Francisco substituted in as Noel's counsel of record and also serves as his counsel on appeal. Wimmer attended the August 22 hearing on the motion for class certification. Despite his recent entry into the case, Wimmer did not request a continuance of the hearing, nor did he seek to withdraw the motion or to supplement the evidentiary showing. The hearing went forward as scheduled on August 22, 2014, with Wimmer representing Noel and the putative class.

In opposing the motion for class certification, Rite Aid submitted to the court a photograph of the pool properly inflated and filled, and it appeared much closer to the size of the pool depicted on the box. The photo submitted by Rite Aid showed three adults and two children in the pool. Even in that photo, however, Noel testified the pool appeared smaller than the pool pictured on the box. Rite Aid's pool photo was accompanied by the declaration of an expert in photogrammetric analysis and photo interpretation, concluding Noel had not set up the pool properly.3 Despite this evidence, Noel's deposition testimony reflected his belief that he did set up the pool properly, and the trial court accepted that testimony as true.

Judge Paul M. Haakenson denied Noel's motion on the UCL and FAL causes of action, finding Noel did not satisfy the class ascertainability requirement for certification under Code of Civil Procedure section 382.4 The court found Noel had presented "no evidence" to establish "what method or methods will be utilized to identify the class members, what records are available, (either from Defendant, the manufacturer, or other entities such as banks or credit institutions), how those records would be obtained, what those records will show, and how burdensome their production would be...." The court also found "a class action is not superior to numerous individual actions" and "will be no more efficient than individual actions in light of the individual issues [sic ] that must be presented on the issue of reliance and damages."

Judge Haakenson also denied the class certification motion on the CLRA cause of action. Due to the stricter proof requirements under the CLRA, the court found Noel had not shown the commonality of issues required for the CLRA. It reasoned "the CLRA requires that all class members must show actual injury in order to recover damages, restitution and/or injunctive relief, unless the advertisement is materially misleading. ( Civ. Code[,] § 1780(a) ; Steroid Hormone Product Cases [ (2010) ] 181 Cal.App.4th [145,] 155 [104 Cal.Rptr.3d 329].)" The court concluded "unless the court finds the packaging materially misleading as a matter of law, in order to recover under a CLRA claim every class member must prove he/she purchased the pool in reliance on the deceptive advertising." The court did not find the packaging materially misleading and therefore found reliance and causation were not predominantly common issues.

Noel timely appealed, alleging error in denying the class certification motion on all three causes of action.5

II. DISCUSSION
A. The Legal Landscape

The CLRA protects consumers against deceptive business practices in the sale of goods and prohibits a seller from representing that goods have characteristics they do not possess. ( Civ. Code, § 1770, subds. (a)(4)(a)(5) & (a)(7) ; see Klein v. Chevron U.S.A., Inc. (2012) 202 Cal.App.4th 1342, 1374, 137 Cal.Rptr.3d 293.) The UCL prohibits acts of unfair competition, defined as "any unlawful, unfair or fraudulent business act or practice...." ( Bus. & Prof. Code, § 17200.) The FAL is equally comprehensive within the smaller and narrower field of false advertising. ( Id. , § 17500; see Kwikset Corp. v. Superior Court (2011) 51 Cal.4th 310, 320, 120 Cal.Rptr.3d 741, 246 P.3d 877.)

Two class action statutes are at issue here. The first, more widely operative statute is Code of Civil Procedure section 382, which governs class actions generally, including actions under the UCL and FAL. Under that statute, a certification motion may be granted where there is "an ascertainable class and a well-defined community of interest among class members." ( 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 courts determine the existence of an ascertainable class using three factors: (1) class definition, (2) class size, and (3) means of identifying class members. ( Sotelo v. Media News Group , Inc . (2012) 207 Cal.App.4th 639, 648, 143 Cal.Rptr.3d 293 ( Sotelo ).) The community of interest inquiry also depends on three criteria: (1) whether common issues predominate over individual issues; (2) whether the plaintiff's claims are typical of the class he or she seeks to represent; and (3) whether the plaintiff is an adequate class representative. ( Id. at p. 651, 143 Cal.Rptr.3d 293 ; Linder v. Thrifty Oil Co. (2000) 23 Cal.4th 429, 435, 97 Cal.Rptr.2d 179, 2 P.3d 27 ( Linder ).)

The CLRA contains its own provision for class actions, similar in many respects to...

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  • Noel v. Thrifty Payless, Inc.
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