Cats and Dogs Animal Hospital, Inc. v. Yelp! Inc.

Filing 16

EX PARTE APPLICATION to Reassign Case No. 2:10-cv-01578 to the Hon. Valerie Baker Fairbank, EX PARTE APPLICATION to Consolidate Cases, as to No. 2:10-cv-01578,, EX PARTE APPLICATION for Appointment of Counsel for the Classes filed by plaintiff Cats and Dogs Animal Hospital, Inc.. (Attachments: # 1 Proposed Order on Plaintiffs' ex parte motion, # 2 Declaration of Gregory S. Weston, # 3 Exhibit A-E to Declaration of Gregory S. Weston, # 4 Declaration of Jack Fitzgerald, # 5 Declaration of Jared H. Beck, # 6 Declaration of Elizabeth Lee Beck)(Weston, Gregory)

1 THE WESTON FIRM GREGORY S. WESTON (239944) 2 JACK FITZGERALD (257370) 3 888 Turquoise Street San Diego, CA 92109 4 Telephone: [phone] Facsimile: [phone] [e-mail] 6 [e-mail] 7 8 10 11

BECK & LEE BUSINESS TRIAL LAWYERS JARED H. BECK (233743) ELIZABETH LEE BECK (233742) Courthouse Plaza Building 28 West Flagler Street, Suite 555 Miami, FL 33130 Telephone: [phone] Facsimile: [phone] [e-mail] [e-mail]

9 Attorneys for Plaintiffs and the Proposed Classes UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA

12 CATS AND DOGS ANIMAL HOSPITAL, INC.; ASTRO APPLIANCE 13 SERVICE; BLEEDING HEART, LLC 14 d/b/a BLEEDING HEART BAKERY; CALIFORNIA FURNISHINGS, INC. 15 d/b/a SOFA OUTLET; CELIBRÉ, INC.; 16 J.L. FERRI ENTERTAINMENT, INC. d/b/a ADULT SOCIALS; LE PETITE 17 RETREAT DAY SPA, LLC; SAN 18 FRANCISCO BAY BOAT CRUISES, LLC d/b/a MERMAIDS CRUISE; WAG 19 MY TAIL, INC.; and ZODIAC 20 RESTAURANT GROUP, INC. d/b/a SCION RESTAURANT, on behalf of 21 themselves and all others similarly 22 situated, 23 24 25 26 27 v. YELP! INC., Defendant. Plaintiffs,

Case No: 2:10-cv-01340-VBF-SS Pleading Type: Class Action EX PARTE MOTION FOR REASSIGNMENT, CONSOLIDATION, DESIGNATION OF LEAD CASE, AND APPOINTMENT OF INTERIM CLASS COUNSEL Judge: Hon. Valerie Baker Fairbank Action Filed: February 23, 2010

Cats and Dogs Animal Hospital, Inc.et al. v. Yelp! Inc., Case No. 2:10-cv-01340-VBF-SS EX PARTE MOTION FOR REASSIGNMENT, CONSOLIDATION, DESIGNATION OF LEAD CASE, AND APPOINTMENT OF INTERIM CLASS COUNSEL.

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TO ALL PARTIES OF RECORD: PLEASE TAKE NOTICE THAT pursuant to C.D. Cal. L.R. 7-19, (1) Consolidating the later-filed action styled LaPausky v. Yelp! Inc.,

3 Plaintiffs will and hereby do apply ex parte to the Court for an order: 5 No. 2:10cv01578 (C.D. Cal, filed March 3, 2010), and any subsequent action to 6 their first-filed action, and reassigning any such actions to this Court; 7 9 10 (2) (3) Designating their First Amended Complaint as the Consolidated Appointing their counsel interim class counsel. 8 Class Complaint; and Pursuant to the Court's Standing Order, any opposition by Yelp! Inc.

11 must be filed no later than twenty-four hours (1 court day) following service, 12 and any opposition by Christine LaPausky must be filed no later than forty13 eight hours (2 court days) following service. 14 16 17 Michael G. Rhodes 18 101 California Street, 5th Floor San Francisco, CA 94111 19 Telephone: [phone] E-Mail [e-mail] 21 Counsel for Yelp! Inc. 22 23 24 25 26 27
1 Cats and Dogs Animal Hospital, Inc.et al. v. Yelp! Inc., Case No. 2:10-cv-01340-VBF-SS EX PARTE MOTION FOR REASSIGNMENT, CONSOLIDATION, DESIGNATION OF LEAD CASE, AND APPOINTMENT OF INTERIM CLASS COUNSEL.

The Contact information for the attorneys representing the Defendant and

15 the action Plaintiffs propose be reassigned and consolidated are: Ronald A. Marron Law Offices of Ronald A. Marron, APLC 3636 Fourth Ave, Ste 201 San Diego, CA 92103 Telephone: [phone] E-Mail: [e-mail] Counsel for Christine LaPausky

1 I. 2

INTRODUCTION Pursuant to Fed. R. Civ. P. 23(g)(2)(A), and the Court's inherent authority to

3 manage this litigation, counsel for Plaintiffs, The Weston Firm and Beck & Lee 4 Business Trial Lawyers (collectively, the "Proposed Interim Class Counsel") 5 respectfully move the Court for an Order (1) consolidating this action with the 6 related LaPausky action, and (2) appointing them interim class counsel for the 7 consolidated action and any future related actions alleging similar claims against 8 Defendant Yelp! Inc. ("Yelp"). 9 10 II. 11 12 BACKGROUND OF THE PRESENT AND THE RELATED CLASS ACTION AGAINST YELP On January 12, 2010 Dr. Gregory Perrault, the owner of Plaintiff Cats and

13 Dogs Animal Hospital, contacted his current counsel in this action, Gregory 14 Weston, and informed him that Yelp's sales employees were trying to extort him 15 into purchasing an advertising package that would require a payment of $3,600 a 16 year. (See Declaration of Gregory S. Weston ("Weston Decl.") ¶5.) Dr. Perrault 17 knew Mr. Weston because he was a member of the class of Los Angeles-area 18 condominium buyers that obtained, as a result of Mr. Weston's effort, a $1.35 19 million all-cash settlement in late 2009. (Weston Decl. ¶6.) 20 In response to Dr. Perrault's inquiry, Mr. Weston, together will his co21 counsel Beck & Lee Business Trial Lawyers ("Beck & Lee"), spent the next six 22 weeks investigating Dr. Perrault's claims and preparing and preparing the initial 23 complaint filed on February 23, and served on Yelp the following day (the "First 24 Complaint"). (Weston Decl. ¶6.) 25 Since then, more than 150 additional small business owners have contacted 26 The Weston Firm and Beck & Lee with stories similar Dr. Perrault's, and the firms 27 continue to receive numerous inquires each day. (Weston Decl. ¶7; Declaration of
1 Cats and Dogs Animal Hospital, Inc.et al. v. Yelp! Inc., Case No. 2:10-cv-01340-VBF-SS EX PARTE MOTION FOR REASSIGNMENT, CONSOLIDATION, DESIGNATION OF LEAD CASE, AND APPOINTMENT OF INTERIM CLASS COUNSEL.

1 Jared H. Beck ("J. Beck Decl.") ¶6.) Proposed Interim Class Counsel have 2 expended substantial time interviewing these small business owners, and preparing 3 the First Amended Class Action Complaint ("Amended Complaint"), which was 4 filed on March 16. The Amended Complaint added a great amount of detail 5 concerning Yelp's unlawful business practices, included several more claims for 6 relief, and named nine additional small business representative plaintiffs. (See 7 Amended Complaint, attached to the Weston Decl. as Exhibit A; Weston Decl. ¶8; 8 J. Beck Decl. ¶7.) 9 11 12 13 14 15 16 17 Since February, when the Proposed Interim Class Counsel filed the First · Filed a detailed 39-page Amended Complaint; · Conferred with Yelp and stipulated to extend Yelp's time to respond; · Further conferred with Yelp's counsel, including in person in San Francisco on March 18, on case management issues; · Scheduled a Rule 26(f) discovery conference with Yelp for April 8; · Conferred with Yelp's counsel on issues of class certification, proposed injunctive relief, and electronic discovery; and · Begun preparing Rule 26 disclosures. 10 Complaint, counsel have, among other things:

18 (Weston Decl. ¶9; J. Beck Decl. ¶8.) On March 3, a mostly verbatim copycat1 of the older First Complaint was 19 20 filed in this District and assigned to the Hon. Manuel L. Real. On March 11, Yelp 21 filed a Notice of Related Case (Dkt. No. 7), proposing that because "the cases call 22 for determination of the same or substantially related or similar questions of law 23 and fact and would entail substantial duplication of labor if heard by different 24 judges . . . they are related and should be heard by the same judge." Plaintiffs agree 25 26 Compare the First Complaint to the LaPausky complaint, attached to the Weston 27 Decl. as Exhibit B and Exhibit C, respectively.
2 Cats and Dogs Animal Hospital, Inc.et al. v. Yelp! Inc., Case No. 2:10-cv-01340-VBF-SS EX PARTE MOTION FOR REASSIGNMENT, CONSOLIDATION, DESIGNATION OF LEAD CASE, AND APPOINTMENT OF INTERIM CLASS COUNSEL.
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1 with consolidation and have provided for the same in the Proposed Order filed 2 concurrently with this motion. 3 Before filing this motion, Plaintiffs conferred with and gave notice to 4 counsel for both Yelp and LaPausky on March 22, and again on March 23, but 5 despite these efforts were unable to obtain a stipulation to the relief proposed 6 herein. (Weston Decl. ¶10 & Exhibit D; Declaration of Elizabeth Lee Beck ("E. 7 Beck Decl.") ¶9.) 8 9 III. 10 11 12 ARGUMENT A. Reassignment and Consolidation of the LaPausky and Any Subsequent Actions is Appropriate.

Fed. R. Civ. P. 42(a) authorizes the Court to grant consolidation where

13 "actions before the court involve a common question of law or fact." In 14 determining whether to consolidate cases, the Court should "weigh the interest of 15 judicial convenience against the potential for delay, confusion and prejudice." 16 Southwest Marine, Inc. v. Triple A Machine Shop, Inc., 720 F.Supp. 805, 807 17 (N.D. Cal. 1989). 18 The two actions here "cover the same class period, are brought against the 19 same defendant[], allege the same violation of law, and allege similar predicate 20 facts." Curry v. Hansen Med. Inc., Nos. 5:09-cv-05094, 5:09-05212, 3:09-cv21 05367, 2010 U.S. Dist. LEXIS, at *3 (N.D. Cal. Feb. 25, 2010) (granting motion to 22 consolidate three related cases and appointing movant lead counsel). In fact, the 23 later-filed LaPaulsky action copies the Cats and Dogs action verbatim except in 24 the small number of allegations specific to the respective plaintiffs--the former is 25 completely subsumed in the latter. 26 Moreover, some factors that might weigh against consolidation--such as
3 Cats and Dogs Animal Hospital, Inc.et al. v. Yelp! Inc., Case No. 2:10-cv-01340-VBF-SS EX PARTE MOTION FOR REASSIGNMENT, CONSOLIDATION, DESIGNATION OF LEAD CASE, AND APPOINTMENT OF INTERIM CLASS COUNSEL.

27 differing trial dates or stages of discovery, see Lewis v. City of Fresno, Nos. CV-F-

1 08-1062, CV-F-09-304, 2009 U.S. Dist. LEXIS 57083, at *3 (E.D. Cal. July 6, 2 2009)--are not present here, as not even an initial case management conference 3 has been held in either action. 4 In sum, because granting the Motion would mean "only one case will remain 5 open and all further litigation will proceed under only one case number, [and 6 therefore] any potential for delay, confusion and prejudice will be greatly 7 reduced," the Court should, respectfully, consolidate the actions. Sisneroz v. 8 Whitman, Nos. 05-cv-00519, 08-cv-01971, 2009 U.S. Dist. LEXIS 48430, at *7-8 9 (E.D. Cal. June 1, 2009). 10 Finally, if the Court grants the Motion, it should, respectfully, order that 11 Plaintiffs' Amended Complaint be designated the Consolidated Class Complaint, 12 since the Amended Complaint entirely subsumes the LaPausky Complaint and 13 better represents the interests of the proposed classes through additional factual 14 allegations and counts. 15 16 17 B. The Court Should Appoint The Weston Firm and Beck & Lee Business Trial Lawyers as Interim Lead Counsel. The Court "may designate interim counsel to act on behalf of a putative class

18 before determining whether to certify the action as a class action." Fed. R. Civ. P. 19 23(g)(3). The appointment of interim counsel during the pre-certification period is 20 appropriate because "it will usually be important for an attorney to take action to 21 prepare for the certification decision." Advisory Committee Note to Rule 22 23(g)(2)(A)2 (2003 amendments). Appointment of interim class counsel is 23 especially appropriate where "there are a number of overlapping, duplicative, or 24 competing suits pending in other courts, and some or all of those suits may be 25 consolidated, [and] a number of lawyers may compete for class counsel 26 27
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The equivalent of what is now Rule 23(g)(3).

4 Cats and Dogs Animal Hospital, Inc.et al. v. Yelp! Inc., Case No. 2:10-cv-01340-VBF-SS EX PARTE MOTION FOR REASSIGNMENT, CONSOLIDATION, DESIGNATION OF LEAD CASE, AND APPOINTMENT OF INTERIM CLASS COUNSEL.

1 appointment. In such cases, designation of interim counsel clarifies responsibility 2 for protecting the interests of the class during precertification activities . . . ." 3 Manual of Complex Litigation Fourth § 21.11 (2004). 4 Factors the Court should consider when appointing class counsel include: (1) 5 the work the counsel have done in identifying or investigating potential claims in 6 the action; (2) counsels' experience in handling class actions, other complex 7 litigation, and the types of claims asserted in the action; (3) counsel's knowledge 8 of the applicable law; and (4) the resources that counsel will commit to 9 representing the class. Fed. R. Civ. P. 23(g)(1)(A); see Levitte v. Google, Inc., Nos. 10 C 08-03369, C 08-03452, C 08-03888, C 08-04701, 2009 U.S. Dist. LEXIS 18198, 11 at *5 (N.D. Cal. Feb. 25, 2009) (court may consider Rule 23(g)(1)(A) factors in 12 appointing interim class counsel). 13 The Proposed Interim Class Counsel is composed of four experienced trial 14 lawyers familiar with class actions and other complex civil litigation, who have 15 previously been appointed counsel in federal class actions. (See Weston Decl. ¶¶116 4; J. Beck Decl. ¶¶1-5; E. Beck Decl., ¶¶1-5; Declaration of Jack Fitzgerald ¶¶11 7 3.). The attorneys of the Proposed Interim Class Counsel have a history of 18 working together on public interest class action lawsuits. For example, the 19 attorneys communicate daily and hold weekly telephonic conference calls to divide 20 work efficiently and avoid duplication of efforts, in the best interests of the Class, 21 thus meeting the Rule 23(g)(1)(B) criterion. Proposed Interim Class Counsel have 22 already demonstrated their ability to manage the Yelp class action, for example by 23 retaining small business clients from across the country to represent two proposed 24 classes, already conferring several times with opposing counsel including once in 25 person, setting dates for the Rule 26(f) conference, stipulating to extend Yelp's 26 time to answer, and beginning discussions on class certification and other case 27 management issues. (Weston Decl. ¶9; J. Beck Decl. ¶8.)
5 Cats and Dogs Animal Hospital, Inc.et al. v. Yelp! Inc., Case No. 2:10-cv-01340-VBF-SS EX PARTE MOTION FOR REASSIGNMENT, CONSOLIDATION, DESIGNATION OF LEAD CASE, AND APPOINTMENT OF INTERIM CLASS COUNSEL.

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Where there is no dispute that attorneys competing for lead class counsel

2 have adequate experience, skill and knowledge, "the first factor favors 3 appointment of [counsel who have] done a majority of the preparation work 4 leading to the filing of these actions, including investigation into the alleged 5 misconduct and identification of the legal theory of the case." Carlin v. Dairy Am., 6 Inc., Nos. 1:09cv0430, 1:09cv0556, 1:09cv0558, 1:09cv0607, 2009 U.S. Dist. 7 LEXIS 50493, at *7 (E.D. Cal. May 29, 2009) (appointing first firm to file suit as 8 lead counsel where "a simple comparison of the original complaint in this action 9 with the [later filed complaints] reveals that they are almost identical.") 10 Moreover, appointing the Proposed Interim Class Counsel as interim class 11 counsel will avoid "the risk of overstaffing or an ungainly counsel structure." 12 Advisory Committee Note to Rule 23(g)(2) (2003 amendments). By appointing the 13 Proposed Class Counsel as interim lead counsel, the Court "will greatly reduce the 14 inevitable duplication of effort" and the "danger of duplication of fees," that would 15 arise from assigning as interim lead counsel anyone other than the Proposed Class 16 Counsel. See Castaneda v. Burger King Corp., No. C 08-04262, 2009 U.S. Dist. 17 LEXIS 99084, at *50 (N.D. Cal. Sept. 25, 2009) (stating that the "overall number 18 of timekeepers should be kept to a small, efficient core group of lawyers . . ."). 19 Finally, the attorneys appointed to serve as class counsel must "fairly and 20 adequately represent the interests of the class." Fed. R. Civ. P. 23(g)(1)(B). Here, 21 the approaches of the Proposed Interim Class Counsel and counsel for Ms. 22 LaPausky have varied dramatically and weigh in favor of appointing the Proposed 23 Interim Class Counsel as interim class counsel. Mr. Marron's involvement in this 24 matter smacks of collusion and has been entirely limited to: 25 26 27 · Filing a verbatim copycat action, in which the class allegations that are alleged to be "like Plaintiff" do not actually correspond to the plaintiffspecific facts alleged;
6 Cats and Dogs Animal Hospital, Inc.et al. v. Yelp! Inc., Case No. 2:10-cv-01340-VBF-SS EX PARTE MOTION FOR REASSIGNMENT, CONSOLIDATION, DESIGNATION OF LEAD CASE, AND APPOINTMENT OF INTERIM CLASS COUNSEL.

1 2 3 4 5 6 7 8 9 10 11 IV. 12 13

· Serving a Notice of Unavailability of Counsel (annexed to the Weston Decl. as Exhibit E), in which Mr. Marron says he will be "unavailable for any purposes whatsoever . . . including but not limited to receiving notices of any kind, responding to ex-parte applications, appearing in court or appearing at depositions" for over six weeks; and · Giving Yelp 60 days to answer the LaPausky Complaint even though, as a verbatim copycat, Yelp had already been served with the same pleading (in the form of Cats and Dogs' Complaint) almost three weeks before being served with the LaPausky Complaint (see Case No. CV 10-1578VBF, Dkt. No. 11). THE OTHER PARTIES' POSITIONS A. POSITION OF RON MARRON, COUNSEL FOR LAPAUSKY Mr. Marron agrees that the Cats and Dogs and LaPausky actions should be

14 consolidated, but opposes the other relief requested herein, including the 15 appointment of Proposed Interim Class Counsel as interim class counsel, and the 16 designation of the Amended Complaint as the Consolidated Class Complaint. 17 18 19 V. 20 B. YELP'S POSITION Yelp's position is described in its own ex parte application, filed today. CONCLUSION For the reasons described herein, Plaintiffs respectfully request the Motion

21 be granted and that the Court (1) order that the Cats and Dogs and LaPausky cases, 22 and any further related cases, be consolidated; (2) that the Amended Complaint be 23 designated the Consolidated Class Complaint; and (3) that the Proposed Interim 24 Class Counsel be appointed interim class counsel. 25 26 DATED: March 24, 2010 27
7 Cats and Dogs Animal Hospital, Inc.et al. v. Yelp! Inc., Case No. 2:10-cv-01340-VBF-SS EX PARTE MOTION FOR REASSIGNMENT, CONSOLIDATION, DESIGNATION OF LEAD CASE, AND APPOINTMENT OF INTERIM CLASS COUNSEL.

Respectfully Submitted,

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/s/ Gregory S. Weston Gregory S. Weston THE WESTON FIRM Gregory S. Weston Jack Fitzgerald 888 Turquoise Street San Diego, CA 92109 Telephone: [phone] Facsimile: [phone] BECK & LEE BUSINESS TRIAL LAWYERS Jared H. Beck Elizabeth Lee Beck Courthouse Plaza Building 28 West Flagler Street, Suite 555 Miami, FL 33130 Telephone: [phone] Facsimile: [phone] Attorneys for Plaintiffs and the Proposed Classes

8 Cats and Dogs Animal Hospital, Inc.et al. v. Yelp! Inc., Case No. 2:10-cv-01340-VBF-SS EX PARTE MOTION FOR REASSIGNMENT, CONSOLIDATION, DESIGNATION OF LEAD CASE, AND APPOINTMENT OF INTERIM CLASS COUNSEL.