318 F.R.D. 160
S.D. Fla.2015Background
- Public Storage operates ~2,200 self-storage facilities nationwide and, beginning in 2006, required tenants to maintain insurance and offered a tenant insurance program (PSTIP) administered by brokers (Willis/Marsh) and underwritten by NHIC; premiums were billed separately on tenant receipts.
- Public Storage collected premiums, remitted them through intermediaries to a Public Storage subsidiary (PS Hawaii), which reinsured and paid an "access fee" back to Public Storage; plaintiffs allege the access fee was an undisclosed kickback that inflated premiums.
- Plaintiffs (led by Brian Morgan) brought claims including RICO (national class) and Florida claims (FDUTPA, breach of contract, unjust enrichment, unconscionability) and moved to certify classes under Rule 23(b)(3).
- The parties agreed class membership is ascertainable from Public Storage records; the court identified and set applicable limitations periods for each certified class/subclass.
- The court conducted the Rule 23 inquiry (ascertainability, numerosity, commonality, typicality, adequacy, predominance, superiority), probing merits only as needed to evaluate predominance and typicality.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Class ascertainability / definition | Class members can be identified from Public Storage records; limit periods to be set by court | Limitations period undefined makes class unclear | Court: class ascertainable; court fixed class periods when certifying classes |
| Typicality / Standing for unconscionability | Morgan suffered same injury as class members from undisclosed kickbacks | Morgan lacks standing to seek injunctive relief and cannot represent unconscionability claim | Court: Morgan typical for RICO, FDUTPA, breach, unjust enrichment; not typical for unconscionability (no standing for injunctive relief) — that claim not certified |
| Predominance for RICO causation | RICO causation can be inferred classwide from uniform written materials, invoices, and payment of billed premiums (analogous to invoices/EOB cases) | Causation is individualized; consumers would not change purchase decisions if told about affiliate profits (survey/econ reports) | Court: Common issues predominate for nationwide RICO class; classwide inference of causation is appropriate |
| Superiority / Manageability | Class action is superior: small individual damages, few competing litigations, concentrated evidence | Class management problems could arise | Court: Class action is superior and manageable; Rule 23(b)(3) satisfied |
Key Cases Cited
- Gilchrist v. Bolger, 733 F.2d 1551 (11th Cir. 1984) (rigorous Rule 23 analysis and district court discretion on certification)
- Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338 (2011) (commonality standard: common contention able to generate common answers)
- Valley Drug Co. v. Geneva Pharm., Inc., 350 F.3d 1181 (11th Cir. 2003) (Rule 23 prerequisites and adequacy inquiry)
- Vega v. T-Mobile USA, Inc., 564 F.3d 1256 (11th Cir. 2009) (predominance requires more demanding inquiry than commonality)
- Bridge v. Phoenix Bond & Indem. Co., 553 U.S. 639 (2008) (reliance is not an element of mail fraud-based RICO; causation may still require proof of reliance depending on theory)
- Klay v. Humana, Inc., 382 F.3d 1241 (11th Cir. 2004) (classwide inference of reliance/causation in financial-transaction RICO cases)
- Borrero v. United Healthcare of New York, 610 F.3d 1296 (11th Cir. 2010) (res judicata concerns when class actions later preclude related state-law claims)
- Simpson v. Sanderson Farms, Inc., 744 F.3d 702 (11th Cir. 2014) (elements of a RICO civil claim)