307 F.R.D. 508
C.D. Cal.2015Background
- Spann sued J.C. Penney alleging a pervasive scheme of false "original/regular" prices and inflated discounts for JCPenney private/exclusive apparel and accessories during Nov 5, 2010–Jan 31, 2012; operative pleading asserts UCL, FAL (including §17501), and CLRA claims seeking injunctive relief, restitution, and statutory damages.
- Plaintiff bought multiple private/exclusive branded items in March 2011 after relying on in-store price placards and receipts that showed higher "original" prices and large discounts; she alleges the prevailing market price was much lower than advertised originals.
- Plaintiff moves to certify a Rule 23(b)(3) class of California purchasers who bought private/exclusive branded apparel/accessories advertised at ≥30% off the stated original/regular price and who did not get refunds; she also seeks appointment of class counsel and alternatively a liability-only class under Rule 23(c)(4).
- Key evidence proffered for classwide proof: JCPenney internal Pricing Guidelines, Price Pacing Flow Charts (PPFCs), company sales data analyzed by plaintiff’s expert Brian Bergmark, and other corporate materials showing planned markdowns and scarce sales at "regular" price.
- Defendant disputed the expert methodology (market definition and use of mode), argued §17501 requires comparison to other retailers (making proof individualized), and challenged predominance and remedies (particularly restitution measures).
- The court rejected the major individualization arguments, accepted a JCPenney-only market for private/exclusive items sold only at JCPenney, overruled the Daubert-style objections at certification, found common questions predominated, and certified the class (appointing Spann as representative and plaintiff’s counsel as class counsel). The court also approved the alternative of certifying a liability-only class if needed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Rule 23(a) prerequisites (numerosity, commonality, typicality, adequacy) are met | Common policies, pricing data, and receipts create common questions and plaintiff’s claims are typical and adequately represented | Individual variations in purchases and advertising mean lack of commonality/typicality | 23(a) satisfied: numerosity, commonality, typicality, and adequacy found |
| Whether common questions predominate under Rule 23(b)(3) for liability (UCL/FAL/CLRA) | Company-wide policies, PPFCs, and sales data allow classwide proof of falsity, deception, materiality, and causation | Prevailing market price under §17501 requires examining other retailers and local markets, making issues individualized | Predominance satisfied for UCL, FAL (including §17501 as construed here for JCPenney-only market), and CLRA; common proof will predominate |
| Proper measure of "prevailing market price" under Cal. Bus. & Prof. Code §17501 | For private/exclusive items sold only at JCPenney, prevailing market price can be derived from JCPenney’s own sales/pricing data | §17501 requires comparing prices of similar items at other local retailers; thus proving falsity is individualized | Where private/exclusive items are sold only by defendant, the relevant market may be the retailer’s own sales; court accepts JCPenney-only market for these products |
| Whether classwide remedies/damages (restitution models) are susceptible to common proof | Proposed measures (full refund/rescission, false transaction value, or defendant’s net profit) are calculable from receipts and company sales data and tie to liability theory | Proposed restitution models are inconsistent with liability and/or inappropriate for classwide relief (invokes Comcast) | Remedies are amenable to class treatment; plaintiff’s damages/restitution models are sufficiently tied to liability and measurable; class certification (with possible bifurcation for damages) is appropriate |
Key Cases Cited
- Armstrong v. Davis, 275 F.3d 849 (9th Cir. 2001) (district court has broad discretion to determine and revisit class certification)
- Wal‑Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (U.S. 2011) (commonality requires a common contention apt to drive the resolution of the litigation)
- Amgen Inc. v. Connecticut Ret. Plans & Trust Funds, 133 S. Ct. 1184 (U.S. 2013) (predominance focuses on common questions provable with common evidence; failure of common proof can doom the class)
- Mazza v. American Honda Motor Co., Inc., 666 F.3d 581 (9th Cir. 2012) (describing Rule 23(a) prerequisites and commonality standard)
- Stearns v. Ticketmaster Corp., 655 F.3d 1013 (9th Cir. 2011) (UCL claims under the fraudulent/unlawful prongs may not require individualized proof of reliance; materiality can establish common causation)
- Hinojos v. Kohl’s Corp., 718 F.3d 1098 (9th Cir. 2013) (recognizes economic injury from deceptive bargain expectations even when product value is unchanged)