Schellenbach v. GoDaddy.com, LLC
321 F.R.D. 613
D. Ariz.2017Background
- Plaintiffs Schellenbach and Ryder seek class certification for purchasers of GoDaddy "Dedicated Servers" (Oct. 23, 2014–Mar. 18, 2017), alleging GoDaddy omitted that the servers were virtualized rather than physical machines.
- Plaintiffs propose a nationwide class and a California subclass; both exclude purchasers who bought via GoDaddy’s /servers webpage (which disclosed "single-tenant virtual machine").
- The /pro/dedicated-server webpage initially omitted virtualization but included "Single‑Tenant VM" after Dec. 16, 2015; the /servers webpage disclosed virtualization throughout the period.
- GoDaddy had extensive phone/chat support and many customers were likely told by agents that the servers were virtual; web and call/chat records suggest large variation in what information purchasers received.
- Plaintiffs’ claims arise under Arizona Consumer Fraud Act (ACFA) for the nationwide class and California’s UCL and FAL for the California subclass; all claims require proof of omission, materiality, and reliance (with nuances by state).
- The court held that individual issues — exposure to the omission, materiality, reliance, and foreign-member issues — predominate, and denied class certification under Rule 23(b)(3) and (b)(2).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Predominance under Rule 23(b)(3) | Classwide proof is possible because the case rests on a single omission (virtualization) and materiality can be assessed objectively for the subclass. | Individual inquiries predominate because purchasers had varied exposures (different webpages, phone/chat interactions, technical sophistication). | Predominance not met; individual issues predominate; class certification denied. |
| Exposure to alleged omission | Many purchasers saw the /pro page that omitted virtualization and thus relied on omission. | Large subset visited /servers page or were otherwise informed (calls/chats); exclusion only for purchasers who bought via /servers page leaves many ambiguous. | Court finds many putative members were exposed to disclosures; individual inquiry required to determine who actually faced the omission. |
| Materiality & reliance — California subclass (UCL/FAL) | Materiality is an objective reasonable‑person question and reliance can be presumed classwide when a misrepresentation is material. | Reliance/presumption fails because representations/omissions were not uniformly made to all class members. | Materiality is classwide in theory, but reliance cannot be presumed because exposure was not uniform; subclass fails predominance. |
| Materiality & reliance — Arizona class (ACFA) | Plaintiffs need not prove materiality now; ACFA omission is actionable. | ACFA materiality is transaction‑specific and requires individualized inquiries into each purchaser’s circumstances and reliance. | Under ACFA materiality and reliance are individualized; classwide proof not possible. |
| Rule 23(b)(2) injunctive relief | An injunction preventing nondisclosure is appropriate; GoDaddy could revert to nondisclosure absent injunction. | Many class members were not exposed to the omission; relief would not be uniform and the case seeks primarily money damages. | (b)(2) inapplicable: injunction would not provide uniform relief; action predominantly seeks monetary relief. |
| Foreign class members | N/A (no argument) | Inclusion of ~4,500 foreign purchasers raises choice‑of‑law, enforceability, and small‑group issues. | Presence of many foreign members further defeats class treatment; plaintiffs failed to address these issues. |
Key Cases Cited
- Wal‑Mart Stores, Inc. v. Dukes, 564 U.S. 338 (2011) (Rule 23 rigorous analysis; (b)(2) requires indivisible relief)
- Erica P. John Fund, Inc. v. Halliburton Co., 563 U.S. 804 (2011) (predominance inquiry begins with elements of the claim)
- In re Wells Fargo Home Mortg. Overtime Pay Litig., 571 F.3d 953 (9th Cir. 2009) (predominance/cohesion standard)
- Zinser v. Accufix Research Inst., Inc., 253 F.3d 1180 (9th Cir. 2001) (individual adjudication defeats Rule 23(b)(3))
- Kwikset Corp. v. Superior Court, 51 Cal.4th 310 (Cal. 2011) (UCL/CFAL injury and causation standards)
- Mazza v. Am. Honda Motor Co., 666 F.3d 581 (9th Cir. 2012) (no presumption of classwide reliance where exposure to statements varied)
- Berger v. Home Depot USA, Inc., 741 F.3d 1061 (9th Cir. 2014) (class certification inappropriate when plaintiffs cannot show uniform exposure)
- Torres v. Mercer Canyons Inc., 835 F.3d 1125 (9th Cir. 2016) (some non‑injured class members acceptable, but large numbers never exposed can defeat predominance)