61 F.4th 1053
9th Cir.2023Background
- LuLaRoe sold clothing through independent "fashion retailers" using a point-of-sale system called Audrey that calculated sales tax by retailer location, not purchaser location, causing Alaska buyers to be charged (and later refunded) improper sales tax.
- LuLaRoe issued refunds for all improperly collected tax (Mar–Jun 2017) but paid no interest; Van sued under Alaska's UTPCPA and common-law conversion seeking interest on refunds and statutory damages.
- The district court certified an Alaska-only class (Rule 23(b)(3)); LuLaRoe petitioned this Court for interlocutory review under Rule 23(f).
- On appeal the Ninth Circuit reaffirmed that even very small monetary losses (fractions of a cent) can satisfy Article III standing.
- The panel rejected LuLaRoe’s voluntary-payment defense as insufficiently supported by evidence, but concluded the district court erred in assessing whether retailer discounts (some apparently given to offset the tax) create individualized predominance problems; it vacated certification and remanded to reassess predominance.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Article III standing for tiny interest amounts | Van: any monetary loss, however small, is a concrete injury | LuLaRoe: fraction-of-a-cent losses are "too trifling" to confer standing | Court: affirmed Van — even de minimis monetary loss suffices for Article III standing |
| Voluntary-payment defense | Van: defense was struck below and does not defeat class certification | LuLaRoe: some purchasers knowingly paid despite being informed, defeating deception/ascertainable loss | Court: jurisdiction to review the issue existed; but LuLaRoe failed to substantiate the defense with sufficient evidence to defeat predominance |
| Retailer discounts that offset tax (predominance/standing) | Van: class-wide issues predominate; discounts are de minimis or not shown to negate injury | LuLaRoe: many transactions received discounts (13,680) and some discounts fully offset tax, creating individualized inquiries and uninjured class members | Court: LuLaRoe produced evidence (including Exhibit E) showing some transactions were discounted to offset tax; district court erred by treating the issue as de minimis — remand to reassess predominance and standing for potentially uninjured members |
| Appellate jurisdiction to review defenses re-visited at certification | Van: prior rulings (motion to strike) limit review; Rule 23(f) scope is narrow | LuLaRoe: re-raised the defense at certification, so it is part of the certification order and reviewable | Court: Rule 23(f) review may include issues that formed part of the certification decision; jurisdiction to review the voluntarily-payment argument was proper here |
Key Cases Cited
- Van v. LLR, Inc., 962 F.3d 1160 (9th Cir. 2020) (prior panel holding that temporary loss of use of money, however small, can be an Article III injury)
- Spokeo, Inc. v. Robins, 578 U.S. 330 (2016) (Article III requires a concrete and particularized injury)
- TransUnion LLC v. Ramirez, 141 S. Ct. 2190 (2021) (a defendant-caused monetary injury is a concrete harm under Article III)
- Czyzewski v. Jevic Holding Corp., 580 U.S. 451 (2017) (monetary loss can be a cognizable injury)
- Olean Wholesale Grocery Coop., Inc. v. Bumble Bee Foods LLC, 31 F.4th 651 (9th Cir. 2022) (plaintiff bears the burden to prove predominance; class-wide proof must be capable of resolving the issue in one stroke)
- Amchem Prod., Inc. v. Windsor, 521 U.S. 591 (1997) (predominance requires analysis of legal and factual questions that qualify each class member’s case)
- Halliburton Co. v. Erica P. John Fund, Inc., 573 U.S. 258 (2014) (predominance inquiry and consideration of varying defenses)
- True Health Chiropractic, Inc. v. McKesson Corp., 896 F.3d 923 (9th Cir. 2018) (defenses unsupported by evidence cannot defeat class certification)