Marsh et al v. Zaazoom Solutions, LLC et al

Filing 282

Order by Hon. William H. Orrick denying 267 Motion to Certify Class. The renewed motion for certification of a nationwide class for the negligence and conversion causes of action, as well as for appointment of class counsel, is DENIED. The case shall proceed with the California class as previously determined. (jmdS, COURT STAFF) (Filed on 5/19/2014)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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AMBER KRISTI MARSH, et al.,

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Case No. 11-cv-05226-WHO

Plaintiffs,
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v.
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FIRST BANK OF DELAWARE, et al.,

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Defendants.

Re: Dkt. No. 267

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United States District Court
Northern District of California

ORDER DENYING RENEWED
MOTION FOR CLASS
CERTIFICATION AND
APPOINTMENT OF CLASS COUNSEL

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INTRODUCTION

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Plaintiff Amber Kristi Marsh has filed a Renewed Motion for Class Certification and for

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Appointment of Class Counsel in her action on behalf of individuals injured through the use of

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remotely created checks (“RCC”) drafted by defendant Jack Henry & Associates, Inc. (“Jack

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Henry”), and deposited with defendant First National Bank of Central Texas (“FNBCT”)

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(collectively, “defendants”).1 Because she has not carried her burden of showing that California or

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Texas law should apply to non-California residents or that a class action involving 50 subclasses

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applying the laws of different jurisdictions is manageable and satisfies Federal Rule of Civil

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Procedure 23, her renewed motion is DENIED.
BACKGROUND

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This order incorporates by reference the factual and legal discussions in my earlier Order

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Granting Plaintiff’s Motion for Class Certification and Appointment of Class Counsel and

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Denying Defendants Jack Henry & Associates and First National Bank of Central Texas’s Motion

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The other defendants in this action, who are not relevant to this motion, are ZaaZoom Solutions,
LLC, ZaZa Pay LLC, MultiECom, LLC, and Online Resource Center, LLC (collectively,
“ZaaZoom Defendants”).

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to Strike Class Allegations (Dkt. No. 265) (“Order”). In the Order, I certified the following class:

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“All individuals from whom, and who were California residents when, Membership Fees were

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collected (or who incurred Bank Account Fees in connection with a collection or attempted

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collection of Membership Fees) by way of remotely created check(s) drafted by Defendant Jack

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Henry & Associates, Inc., and deposited with First National Bank of Central Texas, from May 6,

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2007, to the date of the preliminary approval order.” I also appointed Marsh as the class

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representative and her counsel, Kronenberger Rosenfeld, LLP, and Arias Ozzello & Gignac, LLP,

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as class counsel.

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While Marsh’s original motion sought to certify a nationwide class, I held that she had not
shown that the predominance requirement in Federal Rule of Civil Procedure 23(b)(3) was met

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United States District Court
Northern District of California

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with regard to her causes of action under California law on behalf of a nationwide class because it

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would violate due process to apply California law to non-Californians. In particular, I concluded

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that Marsh “has not demonstrated that the proposed class members’ claims and the parties have

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enough contacts rising to the levels other courts have found sufficient to meet due process

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requirements.” Order 19. Accordingly, I only certified a California class, but granted Marsh leave

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to make a renewed motion for certification of a nationwide class or multiple subclasses with

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different states’ laws applying to each subclass.

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In the Order, I noted that “the Ninth Circuit has found it proper for plaintiffs to make a

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‘renewed motion for certification only after the plaintiffs created subclasses with proper

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representatives for each.’” Order 22. I ordered that the new motion must, “among other things,

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identify[ ] the states of residency for proposed class members, explain[ ] with particularity whether

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any other state’s laws apply and how they relate to California law, and provid[e] ‘a suitable and

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realistic plan for trial of the class claims.’” Order 26 (citation omitted). I would then determine

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whether predominance has been shown for the nationwide class or subclasses.

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On March 27, 2014, Marsh filed her renewed motion for class certification. Dkt. No. 267.

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In her motion, Marsh again asks that I certify a nationwide class under California negligence and

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conversion law. In the alternative, Marsh asks that I certify either a nationwide class under Texas

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law or a nationwide class applying the law of each state to that state’s residents.
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DISCUSSION

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I.

CALIFORNIA LAW CANNOT APPLY TO A NATIONWIDE CLASS.
In the Order, I held that the mere fact that the ZaaZoom Defendants’ websites were

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operated in California, that Jack Henry is registered to conduct business in California and has a

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branch office (in which it is unclear what work is being done) in San Diego, California, and that

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some undefined number of California residents were harmed was insufficient to warrant applying

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California law to non-Californian residents. Order 18, 20. I also pointed out that “Marsh has

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presented no evidence linking FNBCT to California” aside from the harm it allegedly caused to

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California residents. Order 20.

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In support of her renewed argument that the defendants and the proposed nationwide class

United States District Court
Northern District of California

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members have sufficient contacts with California that warrant applying California law to a

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nationwide class, Marsh points to the following facts:

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While ZaaZoom Solutions and ZaZa Pay were registered in Arizona, their principal

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and CEO, Gary Thomas Vojtesak, had a driver’s license showing his residence as

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being in Playa Del Ray, California. Rosenfeld Decl. (Dkt. No. 268) ¶¶ 3-8, Exs. 1-6.

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Vojtesak opened a post office box in Los Angeles, California, that may have been used

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to receive correspondence about the coupon programs. In addition to references to

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Vojtesak, information about the California post office box connected it to ZaaZoom

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email addresses, e.g., [e-mail] and [e-mail], and other

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business names used to run the coupon programs, e.g., “Payday Resource” and

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“Market Power Solutions.” Rosenfeld Decl. ¶¶ 9-10, Exs. 7-8.

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The ZaaZoom Defendants received consumer complaints at this California post office

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box and has responded to at least one of those complaints. These consumer complaints

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echoed the same issues raised in this action, i.e., complaints about unauthorized

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withdrawals from bank accounts after the account owners applied for payday loans.

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Rosenfeld Decl. ¶¶ 11-14, Exs. 9-12.

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Vojtesak regularly sent emails about the operation of the ZaaZoom Defendants, and his
mobile and fax numbers listed in his emails had a California area code. Rosenfeld
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Decl. ¶¶ 15-18, Exs. 13-16.

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The ZaaZoom Defendants’ websites were hosted in California. Rosenfeld Decl. ¶ 19,
Ex. 17.

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After Texas, California residents had the most RCCs created by Jack Henry and

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deposited with FNBCT. Of the approximately 117,000 RCCs created by Jack Henry

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and deposited with FNBCT, 11,920 (10 percent) were from California residents.

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Overall, the ZaaZoom Defendants created 125,320 RCCs in the names of California

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residents. Rosenfeld Decl. ¶¶ 39-40, Ex. 37 at 1-2.
Based on these contacts, the plaintiffs argue that the burden shifts to the defendants to

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show that foreign law, rather than California law, applies. Mot. (Dkt. No. 267) 6. They claim that

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United States District Court
Northern District of California

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the defendants “disregard several significant contacts between California on the one hand and

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Defendants’ misconduct and Class members’ injuries on the other hand.” Reply (Dkt. No. 278) 3.
Marsh again fails to show that due process would allow California law to be applied to a

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nationwide class. For California’s law to be applied in that way, it must have a “significant

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contact or significant aggregation of contacts to the claims asserted by each member of the

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plaintiff class, contacts creating state interests, in order to ensure that the choice of [its] law is not

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arbitrary or unfair.”2 Phillips Petroleum Co. v. Shutts, 472 U.S. 797, 821-22 (1985) (emphases

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added) (internal quotation marks omitted). The problem for Marsh is that she only provides facts

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about the actions of the ZaaZoom Defendants and not the defendants that are at issue in this

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motion: Jack Henry and FNBCT. See, e.g., Reply 3-4. For example, Marsh argues that “the

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At the hearing, Marsh’s counsel cited Experience Hendrix L.L.C. v. Hendrixlicensing.com Ltd.,
742 F.3d 377 (9th Cir. 2014), in support of her argument that there are sufficient contacts here to
support application of California law to a nationwide class. In that case, the Ninth Circuit held
that Washington law could apply in an action involving a Nevada corporation alleged to have
committed trademark infringement by selling infringing products “to the public through Internet
websites and brick-and-mortar retail stores throughout the United States, including the state of
Washington.” Id. at 381. Although the factual discussion in that opinion is limited, that case is
distinguishable because, as the court noted, the defendant had actual locations in Washington from
which it committed the alleged wrongdoing. That is far more than what has been shown here
about either Jack Henry or FNBCT. In any event, Experience Hendrix did not involve a class
action and does not help explain the more discrete question of what constitutes “significant contact
or significant aggregation of contacts to the claims asserted by each member of [a] plaintiff class.”
Phillips Petroleum Co. v. Shutts, 472 U.S. 797, 821 (emphases added).
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ZaaZoom Defendants were a collection of sham Internet companies that have ceased operations

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and disappeared. There is no evidence that they had the bona fide offices, infrastructure, or

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manufacturing centers that a legitimate business would have, and which might be used in a

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conventional choice-of-law analysis.” Reply 4. But the negligence and conversion claims involve

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the RCCs drafted by Jack Henry and deposited by FNBCT, not the conduct of the ZaaZoom

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Defendants.
There are no new facts showing contacts between Jack Henry and FNBCT with California

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relating to the class members’ claims, only that the CEO of ZaaZoom had a personal residence in

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California and conducted some business in California, and that approximately 10 percent of the

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remotely created checks created by Jack Henry and deposited by FNBCT were from California.

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United States District Court
Northern District of California

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Opp’n (Dkt. No. 277) 3. While Marsh argues that all the allegations in this case are interrelated,

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the ZaaZoom Defendants’ contacts with California are irrelevant for purposes of the negligence

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and convergence claims at issue. Based on nearly identical facts relating to Jack Henry and

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FNBCT, I found that Marsh did not meet her burden of showing sufficient contacts in her initial

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motion. Marsh again fails to show that a nationwide class based on California negligence and

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conversion law comports with due process.3

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II.

MARSH FAILS TO SHOW THAT TEXAS LAW SHOULD APPLY TO A

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NATIONWIDE CLASS.

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A. Due Process

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Marsh argues that Texas law should apply to a nationwide class if I found that California

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At the hearing, I asked Marsh’s counsel whether there is any case in which a court has certified a
nationwide class bringing a negligence or conversion cause of action. Counsel identified Joint
Equity Committee of Investors of Real Estate Partners, Inc. v. Coldwell Banker Real Estate Corp.,
281 F.R.D. 422 (C.D. Cal. 2012), in which the court certified a nationwide class bringing fraud,
negligent misrepresentation, negligence, and aiding and abetting claims under California law.
While the motion brief for the plaintiffs in that case argued that the court should apply California
law to the nationwide class and that doing so would not offend due process, the defendants never
addressed those issues in their opposition brief. See id., No. 10-cv-401, at Dkt. No. 58 at 25, Dkt.
No. 153 at 25 n.23. Not surprisingly, the court also did not address those issues. Lacking any
discussion about the matter, the case sheds no light on the question before me.
I also asked counsel whether there is any case in which a federal court in California has applied
another state’s law in a nationwide class action. Counsel was unable to identify any, and I am
aware of none.
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law could not. “Because [she] seeks to invoke the law of a jurisdiction other than California, she

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bears the burden of proof.” Zinser v. Accufix Research Inst., Inc., 253 F.3d 1180, 1187, opinion

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amended on denial of reh’g, 273 F.3d 1266 (9th Cir. 2001).

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Marsh argues that Texas has sufficient contacts with the class members’ claims to satisfy
due process. Jack Henry, doing business as ProfitStars, is headquartered in Texas and FNBCT has

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locations in Texas. Rosenfeld Decl. ¶¶ 20-25, 32, 33, Exs. 18-23, 30, 31. Under the proposed

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class definition, every class member’s RCC was created by Jack Henry and deposited with

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FNBCT. Reply 5. Indeed, the defendants concede that “the RCCs [were] authenticated by

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FNBCT.” Opp’n 4. And there is no real dispute that the defendants’ alleged conduct occurred in

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Texas. See, e.g., Rosenfeld Decl. ¶¶ 26-31, Exs. 24-29. Finally, 11 percent of the proposed class

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United States District Court
Northern District of California

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members are in Texas—the largest number of any state. Rosenfeld Decl. ¶¶ 39-40, Ex. 37, at 2.

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Marsh has shown that the “modest restriction[ ]” imposed by due process is satisfied.

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Phillips Petroleum, 472 U.S. at 818. As noted in the Order, the location of the defendant’s

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headquarters is a relevant contact for due process purposes, In re Charles Schwab Corp. Sec.

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Litig., 264 F.R.D. 531, 538 (N.D. Cal. 2009) (Alsup, J.), as well as where the defendant conducts

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business, Church v. Consol. Freightways, No. 90-cv-2290-DLJ, 1992 WL 370829, at *6 (N.D.

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Cal. Sept. 14, 1992). Marsh has shown that both defendants are located or headquartered in Texas

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and that they transact business there. There is also no dispute that the defendants’ alleged conduct

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occurred in Texas, and Texas has more residents affected by the alleged conduct than any other

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state. See Rosenfeld Decl. ¶¶ 39-40, Ex. 37, at 1-2. Based on these facts, due process is not

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offended by applying Texas law to a nationwide class. However, a conflict-of-law analysis must

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still be applied.

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B. Choice of Law
1. Legal Standard

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“A federal court sitting in diversity must look to the forum state’s choice of law rules to

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determine the controlling substantive law.” Zinser, 253 F.3d at 1187. “Generally speaking the

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forum will apply its own rule of decision unless a party litigant timely invokes the law of a foreign

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state. In such event that party must demonstrate that the latter rule of decision will further the
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interest of the foreign state and therefore that it is an appropriate one for the forum to apply to the

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case before it.” Wash. Mut. Bank, FA v. Super. Ct., 24 Cal. 4th 906, 919 (2001) (citations and

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internal punctuation omitted); see also Keilholtz v. Lennox Hearth Products Inc., 268 F.R.D. 330,

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341 (N.D. Cal. 2010) (holding that the party advocating application of foreign law bears the

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burden of showing that that foreign law should apply).

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A court should apply California’s three-step governmental interest test to make this
determination: (i) the court must first determine whether the relevant law of each of the

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potentially affected jurisdictions is the same or different; (ii) if there is a difference, the court must

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examine each jurisdiction’s interest in the application of its own law under the circumstances of

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the particular case to determine whether a true conflict exists; and (iii) if there is a true conflict,

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United States District Court
Northern District of California

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the court must compare the nature and strength of the interest of each jurisdiction to determine

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which state’s interest would be more impaired if its policy were subordinated to the policy of the

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other state, and then apply the law of the state whose interest would be more impaired. Id. This

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analysis must be performed separately with respect to each state and each claim. Zinser, 253 F.3d

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at 1188.

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2. Whether the laws of each state differ.
“Under the first step of the governmental interest approach, the foreign law proponent must

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identify the applicable rule of law in each potentially concerned state and must show it materially

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differs” from the state whose law is to be applied. Wash. Mut. Bank, 24 Cal. 4th at 919-20. “The

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fact that two or more states are involved does not in itself indicate there is a conflict of laws

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problem.” Id. “There can be no injury in applying [one state’s] law if it is not in conflict with that

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of any other jurisdiction connected to this suit.” Phillips Petroleum, 472 U.S. at 816. If Marsh

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seeks to apply Texas law to a nationwide class, she must show that there is no conflict between

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each state’s law and Texas’s law. See Zinser, 253 F.3d at 1188.

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Marsh argues that “the law of negligence and conversion is substantially uniform among

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the 50 states and the District of Columbia,” and thus there is no true conflict between Texas’s laws

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and those of other states. Mot. 7. In support of her contention, Marsh has submitted what she says

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are surveys of state laws on conversion and negligence. Rosenfeld Decl. Ex. 37. Based on her
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analysis, she argues that the only issue of difference in the laws is with regard to joint and several

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liability: some states have eliminated joint and several liability in tort claims (e.g., Alaska), while

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other states have eliminated joint and several liability only for non-intentional torts (e.g., Arizona),

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while other states still maintain joint and several liability generally (e.g., Alabama). Mot. 7.

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Marsh asserts that “the question of joint and several liability does not affect the liability of any

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Defendant; rather, it only affects the apportionment of damages.” She claims that “courts

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addressing choice of law with respect to joint and several liability have severed the joint and

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several liability issue from the remainder of the tort in deciding what law applies.” Mot. 8 (citing

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Camp v. Forwarders Transp., Inc., 537 F. Supp. 636, 639 (C.D. Cal. 1982); Browne v. McDonnell
Douglas Corp., 504 F. Supp. 514, 518 (N.D. Cal. 1980); Caterpillar Tractor Co. v. Teledyne

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United States District Court
Northern District of California

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Indus., Inc., 53 Cal. App. 3d 693, 697-98 (1975)). Thus, she says, differences among states’ joint

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and several liability laws do not create a “material difference” among their conversion and

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negligence laws. Mot. 8.

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On the other hand, the defendants argue that Texas law “greatly disadvantages” plaintiffs

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who live in states which impose joint and several liability because they will not receive full

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damages if the jury determines that one defendant is less than 50 percent liable and the other is

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insolvent. Opp’n 8.

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I am not persuaded that the laws of the states in which proposed class members reside are

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substantially similar. A review of Marsh’s own surveys shows significant differences in the

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states’ laws. For example, while in Delaware, “[c]onversion is always an intentional exercise of

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dominion or control over the chattel” and “[m]ere Non-Feasence or negligence, without such an

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intent, is not sufficient for a conversion,” in Hawaii, “[c]onversion does not require wrongful

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intent.” Rosenberg Decl. Ex. 37 at 22, 30. Similarly, in Colorado, conversion requires proving

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ownership and possession, while in Iowa, conversion only requires the “intentional exercise of

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control over property which [ ] seriously interferes with the right of another to control it.”

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Rosenberg Decl. Ex. 37 at 18, 38. But in Louisiana, conversion may occur if the property is

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merely “altered” or “used improperly.” Rosenberg Decl. Ex. 37 at 44. Nevada, in turn, holds that

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conversion may occur simply through “an unjustified claim of title to property that causes actual
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interference with the owner’s rights.” Rosenberg Decl. Ex. 37 at 62. Kentucky and Maine have

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the additional requirement that, to prove conversion, a plaintiff must have made a demand for the

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property’s return which the defendant refused, but few other states have such a requirement.

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Rosenberg Decl. Ex. 37 at 42, 46. Similarly, in Indiana, money alleged to have been converted

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“must be a determinate sum with which the defendant was entrusted to apply to a certain

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purpose,” Rosenberg Decl. Ex. 37 at 36 (emphasis added), but almost no other states have this

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requirement.

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State laws also appear to differ with regard to negligence. In New Hampshire, whether a
duty exists depends on “whether the social importance of protecting the plaintiff’s interest
outweighs the importance of immunizing the defendant from extended liability.” Rosenberg Decl.

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United States District Court
Northern District of California

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Ex. 37 at 139. In Nevada, there does not seem to be any balancing required since whether a duty

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exists depends only on “the aggregate of those policy considerations which cause the law to

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conclude that protection is owed.” Rosenberg Decl. Ex. 37 at 157. Wyoming, however, requires

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that a duty be “recognized by law.” Rosenberg Decl. Ex. 37 at 204. In Colorado, Hawaii, and

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South Dakota, whether an act was negligent depends on its having been a “substantial factor” in

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causing the injury. Rosenberg Decl. Ex. 37 at 110, 122; Musch v. H-D Co-op., Inc., 487 N.W.2d

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623, 626 (S.D. 1992). Louisiana, Florida, and South Carolina apply a “but for” inquiry.

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Rosenberg Decl. Ex. 37 at 118, 137, 184. New Jersey makes clear that this distinction matters

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because it explicitly distinguishes the “but for” test from the “substantial factor” test, Rosenberg

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Decl. Ex. 37 at 162, and South Dakota has explicitly rejected the “but for” test, Musch, 487

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N.W.2d at 625. Indeed, the Ninth Circuit has recognized and affirmed a district court’s finding

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that negligence laws differ from state to state. Zinser, 253 F.3d at 1188.

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Based on these differences that Marsh’s own surveys exhibit among state laws, it is clear

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that the laws conflict. Importantly, the differences appear to be material: for example, the

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conversion laws vary in their conduct requirement, and some negligence laws vary in their

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causation requirements. See Mazza v. Am. Honda Motor Co., Inc., 666 F.3d 581, 590-91 (9th Cir.

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2012). These differences can be outcome-determinative. Because the conflicts in the law are

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material, I must proceed to apply the second step of the choice of law analysis.
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3. The relative interests of each state.
Where the plaintiff “allege[s] that consumers from [all] states were defrauded into buying

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[ ] a product in their state[,] . . . all 50 states have an interest in having their own laws applied to

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the consumer transactions that took place within their borders.” Gianino v. Alacer Corp., 846 F.

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Supp. 2d 1096, 1102 (C.D. Cal. 2012); see also Zinser, 253 F.3d at 1187 (“[E]very state has an

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interest in having its law applied to its resident claimants.”). “Although the [ ] potentially

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concerned states have different laws, there is still no problem in choosing the applicable rule of

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law where only one of the states has an interest in having its law applied.” Hurtado v. Super. Ct.,

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11 Cal. 3d 574, 580 (1974). “This means the trial court may properly find [one state’s] law
applicable without proceeding to the third step in the analysis if the foreign law proponent fails to

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United States District Court
Northern District of California

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identify any actual conflict or to establish the other state’s interest in having its own law applied.”

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Wash. Mut. Bank, 24 Cal. 4th at 920.

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Marsh argues that “[n]o state has any interest in fostering the type of business conduct that

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led to the massive fraud at issue.” Mot. 9. She claims that “national and state government

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agencies have uniformly warned against the use of RCCs and have placed the responsibility of

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detecting RCC fraud on the processors and banks that create and accept these instruments.” Mot.

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9. Accordingly, “[t]hese national policy interests outweigh any individual state’s interest in

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applying its own negligence or conversion law.” Mot. 9. Marsh cites various statements from the

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Federal Reserve Bank and the Federal Trade Commission, as well as quotes from a complaint

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filed by the United States in a related case, but she cites no authority from any court. Mot. 9-11.

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She asserts that there is a “strong national policy in preventing processors and banks from turning

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a blind eye to RCC fraud . . . and thus states should feel comfortable subordinating aspects of their

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laws for the purpose of providing nationwide Class relief.” Mot. 11.

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Marsh has not carried her burden of identifying any state’s relevant interests. While she

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argues broadly about various “national” policies, she cites no authority to show that they are

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cognizable in a choice-of-law analysis. As the Ninth Circuit has explained, what matters in

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deciding whether one state’s laws should be applied in favor of other states’ laws are the interests

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of the states whose residents may be affected. Mazza, 666 F.3d at 592. The conflict analysis
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looks at “whether each non-forum state has an interest in having its law applied” and “whether

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each non-forum state has an interest outweighing [the] interest” of the state whose law is being

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proposed for application. Zinser, 253 F.3d at 1188 (emphases added). Without detailing those

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interests, Marsh fails to explain why Texas law should apply, at the exclusion of other states’ laws,

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to the claims of a nationwide class.4
Marsh argued at the hearing that if I did not certify a nationwide class, putative class

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members in every state other than California would not obtain any relief from defendants’

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wrongful conduct. She posited that, surely, every state would want its citizens protected from the

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fraud that allegedly occurred here. But she proposed no limiting principle, and the logical
extension of her argument would eliminate every barrier to any class that seeks certification for

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United States District Court
Northern District of California

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multistate or nationwide relief and undermine well-recognized doctrines of federalism. There is

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no authority for that proposition.

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III.

Marsh argues that I can still certify a nationwide class applying the laws of 49 states and

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SUB-CLASSES

the District of Columbia.5
“Courts routinely deny class certification where the laws of multiple states must be

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applied . . . .” Grayson v. 7-Eleven, Inc., No. 09-cv-1353, 2011 WL 2414378, at *3 (S.D. Cal.

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June 10, 2011) (decertifying class bringing conversion claim because of difficulty in applying

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varying state laws); but see In re Prudential Ins. Co. Am. Sales Practice Litig. Agent Actions, 148

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F.3d 283, 315 (3d Cir. 1998) (“Courts have expressed a willingness to certify nationwide classes

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on the ground that relatively minor differences in state law could be overcome at trial by grouping

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similar state laws together and applying them as a unit.”). One court has observed, “no matter

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how similar—or comparable—each state’s law on negligence may be, it is clear—despite

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Even if Marsh had identified other jurisdictions’ relevant interests, I am skeptical that the
outcome of this order would have been different because as the Ninth Circuit has noted,
“California’s interest in applying its law to residents of foreign states is attenuated.” Mazza v. Am.
Honda Motor Co., Inc., 666 F.3d 581, 594 (9th Cir. 2012). In making this observation, the Ninth
Circuit cited language from the Supreme Court indicating that states generally have “no legitimate
interest in protecting nonresident[s],” id. (citing Edgar v. MITE Corp., 457 U.S. 624, 644 (1982)),
and Marsh has provided no reason to believe that this principle would not also apply to Texas.
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There are no proposed class members in West Virginia. Mot. 12 n.2.
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plaintiffs’ argument—that the negligence laws of the fifty states have some differences.” Haley v.

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Medtronic, Inc., 169 F.R.D. 643, 653 (C.D. Cal. 1996); see also Bresson v. Thomson McKinnon

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Sec. Inc., 118 F.R.D. 339, 344 (S.D.N.Y. 1988) (“The state laws governing [negligence] claims do

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vary significantly” and “are therefore unsuited to class treatment.”). The Seventh Circuit

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memorably puts it, “It is no doubt true that at some level of generality the law of negligence is

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one, not only nationwide but worldwide. . . . [but t]he voices of the quasi-sovereigns that are the

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states of the United States sing negligence with a different pitch.” Matter of Rhone-Poulenc

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Rorer, Inc., 51 F.3d 1293, 1300-01 (7th Cir. 1995) (Posner, J.). Another court has found that

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variations in only three states’ law concerning conversion “militate against a predominance
finding.” Jim Moore Ins. Agency, Inc. v. State Farm Mut. Auto. Ins. Co., Inc., No. 02-cv-80381,

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United States District Court
Northern District of California

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2003 WL 21146714, at *11 (S.D. Fla. May 6, 2003), report and recommendation adopted, 2003

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WL 22097937 (S.D. Fla. Sept. 2, 2003). As the Sixth Circuit explained, “If more than a few of the

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laws of the fifty states differ, the district judge would face an impossible task of instructing a jury

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on the relevant law, yet another reason why class certification would not be the appropriate course

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of action.” In re Am. Med. Sys., Inc., 75 F.3d 1069, 1085 (6th Cir. 1996).

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I decline to certify a nationwide class that will have 50 subclasses applying the laws of 50

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different jurisdictions. As one court explained, “Although plaintiff contends that this hurdle is not

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a major problem in the instant case since state laws on negligence [ ] are likely to be quite similar,

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the problems and complexities raised by having to consider so many different state laws—even if

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they are relatively the same—convince the Court that class certification would be inappropriate in

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the instant litigation. . . . As a result, the Court would be forced to go through—and to have the

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jury go through—an individual analysis of each state’s negligence law in order to determine

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defendant’s liability for negligence with regard to each individual defendant.” Haley, 169 F.R.D.

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at 653. Such a class would fail to meet the predominance or superiority requirements of Rule 23.

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See Zinser, 253 F.3d at 1190 (“The complexity of the trial would be further exacerbated to the

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extent that the laws of forty-eight states must be consulted to answer such questions.”) (internal

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punctuation omitted). That would be true here if I adopted Marsh’s proposal.

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I have serious concerns about the practicality of such a class action.6 While it was Marsh’s

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responsibility to provide “a suitable and realistic plan for the trial of the class claims,” Order 22,

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all that she has provided me is a suggestion that I use different jury instructions “state-by-state.”

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Reply 14. That is insufficient. “[A] court cannot rely on assurances of counsel that any problems

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with predominance or superiority can be overcome.” Castano v. Am. Tobacco Co., 84 F.3d 734,

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742 (5th Cir. 1996). Further, Marsh has not identified a proper representative for each subclass as

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my Order indicated she must. Order 22. Indeed, Marsh did not even identify a plaintiff for the

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proposed nationwide class under Texas law. Certification of a class broader than the one I already

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certified is not warranted.
CONCLUSION

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On her second attempt, Marsh has not carried her burden of showing that California’s or

United States District Court
Northern District of California

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another state’s laws should apply to non-California residents, or that such a class action is

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manageable. Accordingly, the renewed motion for certification of a nationwide class for the

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negligence and conversion causes of action, as well as for appointment of class counsel, is

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DENIED. The case shall proceed with the California class as previously determined.
IT IS SO ORDERED.

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Dated: May 19, 2014
______________________________________
WILLIAM H. ORRICK
United States District Judge

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“It is one thing to apply California law to adjudicate the claims of a California class (this is a
normal occurrence) but quite another to [ ] to adjudicate the rights of the residents of the other 49
states. The undersigned judge has worked through this issue in many previous proposed
nationwide class actions. When the claims are based on state law, as here, the law of fifty states is
likely to apply [ ] and it is unmanageable.” Rodriguez v. Instagram, LLC, No. 12-cv-6482 WHA,
2013 WL 3732883, at *3 (N.D. Cal. July 15, 2013).
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