CHRISTINE DANCEL, Plaintiff-Appellant, v. GROUPON, INC., Defendant-Appellee.
No. 19-1831
United States Court of Appeals For the Seventh Circuit
ARGUED SEPTEMBER 16, 2019 — DECIDED DECEMBER 18, 2019
Before BAUER, BRENNAN, and ST. EVE, Circuit Judges.
I. Background
Groupon, Inc. is an online marketplace that sells vouchers for other businesses. Groupon‘s website gives each business its own page with information about the business and the discounts available. Between April 2015 and February 2016, some visitors to the site could scroll down each page to see a “Photos” section that displayed up to nine pictures. If the visitor clicked a button, the page would reveal up to eighteen more. Groupon collected and displayed these pictures automatically using what it calls the “Instagram Widget.” As its name suggests, this Widget pulled publicly available pictures from the social networking service Instagram. It selected which pictures to assign to each page based on data linking the photos to the advertised business‘s location. When a Groupon visitor hovered her cursor over a displayed photo, the Widget would show the unique, user-selected username of the Instagram account whose photo was being displayed and a caption, if the user had attached one to the photo.
Dancel is an Instagram user, and like all Instagram users, her account had a username—namely, “meowchristine.” In 2015, Dancel uploaded to her account a picture of herself and her boyfriend visiting Philly G‘s, a restaurant in Vernon Hills, Illinois. This picture was one of several Groupon displayed on Philly G‘s page while the Widget was active.
Dancel alleges that Groupon‘s inclusion of her photo and username on Philly G‘s page violated the IRPA, which prohibits the use of a person‘s identity—meaning an “attribute of an individual that serves to identify that individual to an ordinary, reasonable viewer or listener“—for commercial purposes without consent.
In response to these new class definitions, Groupon removed the case to federal court. Dancel tried to argue this removal came too late, but the district court disagreed, denied her motion to remand to state court, and proceeded to decide whether to certify her proposed class under
The district court found Dancel‘s categorical theory “unpersuasive.” Though the court accepted that a common question existed as to whether any username identifies an individual, that question was not enough to certify a class because it “ignore[d] the individual inquiry that is the essence of determining ‘identity’ under the IRPA.” The district court listed several of the usernames belonging to class members—e.g., eawhalen, artistbarbie, isa.tdg, loparse, johanneus—and concluded that it was “simply impossible to make any type of across-the-board determination as to whether these names ‘identify’ a particular person, as that term is defined by the IRPA.” Because it determined that the IRPA, as applied to the facts of this case, required a “username-by-username (photo-by-photo)” inquiry, the court found that common questions would not predominate over individual ones and denied certification. Dancel petitioned for review of that decision, and we granted the petition.
II. Jurisdiction
We start our analysis where we left off after our previous opinion: the district court‘s jurisdiction. Dancel v. Groupon, Inc., 940 F.3d 381, 386 (7th Cir. 2019). The Class Action Fairness Act,
On remand, Groupon amended its allegations and supplemented its notice of removal with three affidavits in which the affiants attested to their significant ties to their home states, which are not Illinois or Delaware. Groupon also provided the incorporation and registration documents for two Instagram-using businesses based in California and Missouri. Dancel argued that these businesses and one of the affiants fell outside the class definition, but she conceded that the other two affidavits belonged to putative class members domiciled in Virginia and California, respectively. See Myrick v. WellPoint, Inc., 764 F.3d 662, 664 (7th Cir. 2014) (“Citizenship means domicile (the person‘s long-term plan for a state of habitation) rather than just current residence.“). The district court saw no reason to conduct an evidentiary hearing to peer beyond Groupon‘s allegations and Dancel‘s concession (which was well supported by Groupon‘s evidence anyway), and neither do we. See Tilden v. Comm‘r, 846 F.3d 882, 887 (7th Cir. 2017) (explaining that parties can agree to the fact of the parties’ citizenship—as distinct from the existence of jurisdiction—if the agreement is not collusive). With these amended allegations that at least one class member was a citizen of Virginia and another of California, Groupon has shown minimal diversity between it and the proposed class, and the district court‘s
III. Class Certification
Dancel argues that the district court improperly addressed the merits of her IRPA claim at the class-certification stage, and that, to the extent those merits are not off limits, the court resolved them incorrectly. She posits that the individual content of each username is irrelevant to the class‘s claims. In her view, an Instagram username is inherently an identity under the IRPA because it is unique—no two accounts can use the same username at the same time. Because this theory ignores the usernames’ content, Dancel maintains it cannot depend on the individual usernames of the class members but only on the common evidence describing the general function of Instagram usernames and the Instagram Widget. She primarily insists that she is entitled to test her theory, regardless of its validity, on a class-wide basis because Rule 23 prohibits a court from resolving the merits of a claim at the class-certification stage. To the extent that the court can consider the validity of her theory, she contends the district court imposed a higher evidentiary burden than the IRPA requires.
We review the district court‘s certification decision for an abuse of discretion, but a district court necessarily abuses its discretion if its reasoning is based on a legal error, like those Dancel asserts. See Beaton v. SpeedyPC Software, 907 F.3d 1018, 1025 (7th Cir. 2018), cert. denied, 139 S. Ct. 1465 (2019). We conclude that the district court did not legally err in its interpretation of the Federal Rules of Civil Procedure or the IRPA and did not otherwise abuse its discretion.
A. Rule 23(b)(3)
A plaintiff seeking class certification bears the burden of proving that her proposed class meets the four requirements of
Federal Rule of Civil Procedure 23(b)(3) requires a district court to find that “the questions of law or fact common to class members predominate over any questions affecting only individual members.” This distinction is often easier stated than applied:
An individual question is one where “members of a proposed class will need to present evidence that varies from member to member,” while a common question is one where “the same evidence will suffice for each member to make a prima facie showing [or] the issue is susceptible to generalized, class-wide proof.”
Tyson Foods, Inc. v. Bouaphakeo, 136 S. Ct. 1036, 1045 (2016) (alteration in original) (quoting 2 W. Rubenstein, Newberg on Class Actions § 4:50 (5th ed. 2012)); Messner v. Northshore Univ. HealthSystem, 669 F.3d 802, 815 (7th Cir. 2012) (“If, to make a prima facie showing on a given question, the members of a proposed class will need to present evidence that varies from member to member, then it is an individual question. If the same evidence will suffice for each member to make a prima facie showing, then it becomes a common question.” (quoting
In resolving whether a common question exists or predominates, the Supreme Court has emphasized that “Rule 23 grants courts no license to engage in free-ranging merits inquiries at the certification stage.” Amgen Inc. v. Conn. Ret. Plans & Tr. Funds, 568 U.S. 455, 466 (2013); see also Messner, 669 F.3d at 811 (“[T]he court should not turn the class certification proceedings into a dress rehearsal for the trial on the merits.“). Critically, “Rule 23 allows certification of classes that are fated to lose as well as classes that are sure to win.” Schleicher v. Wendt, 618 F.3d 679, 686 (7th Cir. 2010). Still the merits are not completely off limits. Rule 23 is more than “a mere pleading standard,” and the court must satisfy itself with a “rigorous analysis” that the prerequisites of certification are met, even if that analysis has “some overlap with the merits of the plaintiff‘s underlying claim.” Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 350–51 (2011). We have described this analysis as involving a “peek at the merits” that is “limited to those aspects of the merits that affect the decisions essential under Rule 23.” Schleicher, 618 F.3d at 685.
The Supreme Court discussed the limits and extent of this peek in Amgen Inc. v. Connecticut Retirement Plans and Trust Funds, 568 U.S. 455. There the Court confronted a fraud-on-the-market securities class action. The underlying securities fraud claim required a plaintiff to prove, among other things, a material misstatement or omission and reliance on that misrepresentation. Id. at 460–61. Ordinarily, reliance is a fact-
The Court gave two reasons why a plaintiff does not need to establish materiality in order to certify a class but can wait to prove it at the merits stage. First, materiality is an objective question that can be proven through common evidence. Id. at 467. Second, the Court emphasized that “there is no risk whatever that a failure of proof on the common question of materiality will result in individual questions predominating.” Id. at 467–68. This is so because materiality is an element of every plaintiff‘s securities-fraud claim and not just a prerequisite to the class‘s fraud-on-the market theory, as publicity and market efficiency are. Id. at 468, 473–74. “As to materiality, therefore, the class is entirely cohesive: It will prevail or fail in unison. In no event will the individual circumstances of particular class members bear on the inquiry.” Id. at 460.
The parties agree that the IRPA‘s identity element is like materiality in that it, too, is an objective-inquiry—it asks whether an attribute would identify a plaintiff to the “ordinary, reasonable viewer or listener,”
This distinction is not fatal to class certification, Dancel argues, because this court has permitted certification even when there was a risk the court might later need to decertify the class. In Bell v. PNC Bank, N.A., 800 F.3d 360 (7th Cir. 2015), we affirmed a district court‘s certification of a class alleging PNC had a policy requiring employees to work unpaid overtime. Id. at 372. We recognized that, if the policy were found not to exist then the class would be decertified, and the class members could still bring individual claims. Those individual claims, though, “would be based on an entirely different legal theory“—“Employee A alleging that her manager, Manager B, forced her to work off-the-clock.” Id. at 378. The class‘s policy-based theory would still “prevail or fail for the class as a whole.” Id. Similarly, in Costello v. BeavEx, Inc., 810 F.3d 1045 (7th Cir. 2016), we reversed the denial of certification to a class of couriers arguing that they were employees—not independent contractors—of a delivery company, BeavEx. Id. at 1048–49. Under state law, all workers were employees unless the employer could prove three elements, but the district court thought only the second element (whether the plaintiffs performed work outside the usual course of the employer‘s business) was subject to common proof. Id. at 1059. The district court refused to consider whether this common question predominated for fear of deciding the merits of the other elements. Id. at 1060. We explained that even if only this single element was subject to common proof, that did not prevent certification. Id. If the plaintiffs won on that element, then all
Dancel‘s theory is different from those in Bell and Costello because it presents a question that is common only if she is right. If the class in Bell lost on its theory, no member could argue that PNC had a policy only with respect to her overtime; nor could an individual courier in Costello argue that BeavEx‘s usual course of business included delivery in his situation but not the class‘s. The question—does this policy exist? is couriering BeavEx‘s usual business?—was common regardless of its answer. If the common proof failed as to that answer, the plaintiffs could not use individualized proof in its stead. Any individual class member with a claim remaining would have to rely on different proof to answer a different question to establish the defendant‘s liability.
In contrast, the answer to Dancel‘s proposed common question—are usernames categorically identities under the IRPA?—matters not only for the merits but for commonality. If the answer to that question is yes, then one significant aspect of the case can be resolved in the class‘s favor (if, as a factual matter, Groupon used the usernames within the meaning of the IRPA). But if usernames are not categorically an identity under the IRPA, and the court decertified the class, then the same element would remain entirely subject to dispute for each plaintiff. Nothing significant will have been decided, because each member could provide individualized evidence—her username‘s content—on top of the common evidence to prove her username is an identity. Indeed,
This difference arises from the fact that Dancel‘s proposed common question is whether identity is a common or an individualized question in the first place. Must identity be proven through “evidence that varies from member to member” (the username‘s content) or can “the same evidence” (its being a username) “suffice for each member to make a prima facie showing“? Bouaphakeo, 136 S. Ct. at 1045. This is not a question that can be saved for after certification; it is precisely the question the court must answer at certification. As we said in Bell, “[a] proposed class of plaintiffs must prove the existence of a common question … but it need not prove that the answer to that question will be resolved in its favor.” 800 F.3d at 376. Like PNC, though, Dancel has “conflated [these] two inquiries,” id., by failing to separate her argument for why a common question exists with an argument that the question should be resolved in her favor. A court cannot decide the latter, but it must decide the former—and it must police this fine line or else reduce certification to a mere pleading standard.
The Third Circuit faced a situation like this in Gonzalez v. Corning, 885 F.3d 186 (3d Cir. 2018). The plaintiff there alleged that the defendant‘s shingles were defectively designed because some would not last as long as advertised. Id. at 196. Whether any individual shingle would fail, though, could be determined only on review of that shingle. Id. The plaintiff came up with a theory to avoid this problem: the defect was
The same reasoning applies here. Dancel is trying to define the concept of identity in a common way so that it covers up individual questions that each class member might raise. Her use of the word “categorically” makes her theory universal, but only in the way “any question becomes universal when it includes the word ‘all.‘” Id. This is not a disingenuous tactic under Rule 23—it is no different from how a securities-fraud class can paper over the individualized question of reliance with the fraud-on-the-market theory under which all buyers are presumed to rely on material public statements. See Amgen, 568 U.S. at 461. Whether the tactic succeeds, however, must be determined before class certification by considering the substantive law underlying the putative class‘s claims. See Richard A. Nagareda, Class Certification in the Age of Aggregate Proof, 84 N.Y.U. L. Rev. 97, 104 (2009).
The district court, then, was right to identify the starting point as “the substantive elements of plaintiffs’ cause of action
B. The IRPA
We start with the substantive elements of an IRPA claim. The IRPA prohibits “us[ing] an individual‘s identity for commercial purposes during the individual‘s lifetime without having obtained previous written consent from the appropriate person.”
Dancel argues that all Instagram usernames are names or identities under the IRPA because an ordinary, reasonable viewer would know that a username is intended to identify one and only one user. Because a username is innately unique, Dancel contends, the viewer would not need to know what the username is to know that it identifies an individual.
Dancel supports her categorical rule by comparing usernames to email addresses, but her analogy cuts against her. In United States v. Hastie, 854 F.3d 1298 (11th Cir. 2017), the Eleventh Circuit concluded that email addresses can qualify as “personal information” under the Driver‘s Privacy Protection Act,
A username‘s content, and not its nature, is likewise necessary to decide whether it is an identity under the IRPA.
Dancel insists that this individualized inquiry is inconsistent with the IRPA‘s broad scope, which is intended to protect lay people‘s identities. She argues that the content of a username could matter only if the person needed to know to whom the username belonged from just the username itself. The Illinois common law had just such a “notoriety” element, whereby the plaintiff needed to show her identity had “intrinsic value,” like a celebrity‘s might. Dwyer v. Am. Exp. Co., 652 N.E.2d 1351, 1356 (Ill. App. Ct. 1995). As Dancel rightly notes,
Even if individual proof is necessary, Dancel proposes that she could provide it through class members’ affidavits attesting to their ownership of their usernames. We have permitted district courts, in their discretion, to use individual affidavits to identify class members after liability is established class-wide, Mullins v. Direct Dig., LLC, 795 F.3d 654, 672 (7th Cir. 2015), or to resolve individual merits questions after resolution of class issues, Beaton, 907 F.3d at 1030. Dancel‘s proposal goes much further than this. She asks to use class members’ affidavits not to clean up individual questions left over after some other, common question has been decided, but to provide individual proof for the same question that she says can
We emphasize that neither we nor the district court have decided the merits of any putative class member‘s claim. Some Instagram usernames—maybe a great many of them—might qualify as identities under the broad definition in the IRPA. An ordinary, reasonable viewer might recognize that meowchristine serves to identify Christine Dancel, or that isa.tdg, artistbarbie, and loparse serve to identify their respective users. We cannot say. What we can say is, under the IRPA, that ordinary, reasonable viewer would need to have evidence of which username, which account, and which person it was linking before it could make that decision. This individualized evidentiary burden prevents identity from being a predominating common question under Rule 23(b)(3).
IV. Conclusion
We affirm the district court‘s order denying class certification.