231 Cal. App. 4th 112
Cal. Ct. App.2014Background
- Plaintiffs Borrowers sued CashCall alleging secret monitoring of confidential telephone conversations in violation of Penal Code §632.
- Class was certified on the §632 claim; damages capped at the statutory $5,000 per violation.
- On remand from CashCall II, CashCall moved to decertify, arguing numerous individual issues predominate.
- The trial court decertified the class, finding changed circumstances and predominance of individual issues.
- The appellate court affirmed, holding decertification was proper due to individualized liabilities and the limited role of common issues.
- Court discussed the law-of-the-case effect of CashCall II and the continuing need to preserve statutory elements in §632 actions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did CashCall II constitute changed circumstances justifying decertification? | Kight argued changed circumstances warrant reconsideration of certification. | CashCall contended CashCall II created new factual issues necessitating decertification. | Yes; changed circumstances allowed decertification. |
| Do individual issues predominate over common issues for §632 liability? | Common questions remain and support class treatment. | Numerous individualized factors predominate, defeating common liability questions. | Individual issues predominate; class action inappropriate. |
| Can confidential-communication under §632 be resolved on a class-wide basis given individualized expectations? | There is a common objective standard for confidentiality. | Confidentiality depends on each plaintiff's circumstances and experiences. | Confidentiality requires individualized proof; class-wide resolution not viable. |
| Is one-way intervention (merits-first ruling before certification) a barrier to decertification? | Decertification should be barred to prevent prejudice from merits ruling. | Merits-first concerns do not preclude decertification where changed circumstances exist. | No; decertification permitted and not barred by one-way intervention concerns. |
Key Cases Cited
- CashCall, Inc. v. Superior Court (CashCall II), 200 Cal.App.4th 1377 (2011) (affirms §632 applies to confidential communications even within a single corporate entity; analyzes reasonable-expectation of privacy)
- Flanagan v. Flanagan, 27 Cal.4th 766 (2002) (defines confidential communications and objective test for reasonable expectation of privacy)
- Kearney v. Salomon Smith Barney, Inc., 39 Cal.4th 95 (2006) (supports liberal construction of §632 and consideration of notice/disclosures in privacy expectations)
- Hataishi v. First American Home Buyers Protection Corp., 223 Cal.App.4th 1454 (2014) (applies objective reasonableness test to outbound calls; individualized inquiry required for confidentiality)
- Duran v. U.S. Bank National Assn., 59 Cal.4th 1 (2014) (explains predominance and class-certification standards; importance of manageability)
- Medrazo v. Honda of North Hollywood, 166 Cal.App.4th 89 (2008) (distinguishes cases where common issues predominate; emphasizes substantive issues over procedural expediency)
- Lewis v. Robinson Ford Sales Inc., 156 Cal.App.4th 359 (2007) (distinguishes cases where liability could be proven by documentary records; relevance depends on factual context)