953 F.3d 624
9th Cir.2020Background
- LSW sold life-insurance policies accompanied by two types of illustrations: pre-application (may be given before or at application) and batch (typically delivered with the issued policy). All five named plaintiffs here received pre-application and batch illustrations.
- Plaintiffs sued under California's Unfair Competition Law (UCL), alleging LSW’s illustrations misled purchasers by failing to define columns labeled “Guaranteed Values at 2.00%” / “2.50%” and by misrepresenting elimination of an administrative fee after ten years; they alleged they relied on those illustrations in buying policies.
- Procedural history: district court earlier dismissed similar UCL claims and in 2013 decertified a class limited to pre-application recipients; after appellate developments the court in 2018 certified a narrower class limited to purchasers who received pre-application illustrations and applied a presumption of reliance.
- LSW petitioned for permission to appeal the certification order; Plaintiffs moved to reconsider and sought to broaden the class to include batch-only recipients; the district court denied reconsideration (initially without prejudice for meet-and-confer, later on the merits).
- On appeal the Ninth Circuit reviewed whether the district court misapplied Briseno and whether the class definition improperly avoided predominance problems; it also considered Plaintiffs’ cross-appeal for enlargement of the class and timeliness under Rule 23(f).
- The Ninth Circuit affirmed certification, held any misreading of Briseno was harmless, approved tailoring the class definition to those exposed to the alleged misrepresentations, and dismissed Plaintiffs’ cross-appeal as untimely/procedurally improper.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether district court misapplied Briseno when declining to treat administrability as a freestanding bar to certification | Briseno permits courts to decline a freestanding administrability requirement; certification remains proper | Briseno does not excuse courts from considering member-identification/manageability under predominance | Court agreed Briseno was narrow but any misinterpretation was harmless; no reversible error; certification affirmed |
| Whether limiting the class to pre-application illustration recipients improperly embeds the exposure issue into the class definition to avoid predominance problems | Limiting the class to those who received pre-application illustrations is proper tailoring to ensure exposure and a reliance presumption | Limiting the class improperly manipulates the definition to evade individualized predominance issues | Court held tailoring class definitions to include only exposed persons is permissible; class definition lawful |
| Whether individualized questions about who saw/misunderstood illustrations and who received corrective information defeat predominance | Plaintiffs: a UCL reliance presumption applies because class members were exposed to the same illustrations | LSW: individualized proof of exposure and corrective information predominates and defeats Rule 23(b)(3) | Court held exposure is relevant to predominance only to establish a reliance presumption; logistical identification issues need not be decided under predominance and do not defeat certification here |
| Whether Plaintiffs timely and properly appealed the denial of reconsideration / attempted to expand the class | Plaintiffs: their motions and re-noticing tolled or extended Rule 23(f) deadlines; reconsideration permitting merits review created an appealable order | LSW: Plaintiffs missed Rule 23(f) deadlines and their reconsideration practice was procedurally improper | Court held Plaintiffs’ appeals untimely or non-appealable under Rule 23(f); adopted material-change/status-quo test for appealability of reconsideration orders; cross-appeal dismissed |
Key Cases Cited
- Briseno v. ConAgra Foods, Inc., 844 F.3d 1121 (9th Cir. 2017) (rejecting a freestanding administrability requirement and explaining manageability concerns belong in Rule 23(b)(3) superiority analysis)
- Stearns v. Ticketmaster Corp., 655 F.3d 1013 (9th Cir. 2011) (discussing reliance presumption in UCL class actions and predominance inquiry)
- In re Tobacco II Cases, 207 P.3d 20 (Cal. 2009) (California Supreme Court recognizing that absent UCL class members need not prove individualized reliance when classwide exposure is shown)
- Mazza v. Am. Honda Motor Co., 666 F.3d 581 (9th Cir. 2012) (class definition must be tailored to include only members exposed to the allegedly misleading advertising where no massive campaign exists)
- Berger v. Home Depot USA, Inc., 741 F.3d 1061 (9th Cir. 2014) (no reliance presumption where plaintiff did not allege that all proposed class members were exposed to defendant’s practices)
- Rikos v. Procter & Gamble Co., 799 F.3d 497 (6th Cir. 2015) (considered reliance presumption and issues about ascertainability/member identification in UCL-like claims)
- Nutraceutical Corp. v. Lambert, 139 S. Ct. 710 (2019) (Supreme Court on tolling of Rule 23(f) deadlines when a timely reconsideration motion is filed)