Ehret v. Uber Technologies, Inc.

Filing 118

ORDER by Judge Edward M. Chen Granting in Part and Denying in Part 99 Plaintiff's Motion for Class Certification. (emcsec, COURT STAFF) (Filed on 12/2/2015)

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1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 Plaintiff, 8 UBER TECHNOLOGIES, INC., I. 12 For the Northern District of California United States District Court Docket No. 99 Defendant. 11 13 ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF’S MOTION FOR CLASS CERTIFICATION v. 9 10 Case No. 14-cv-00113-EMC CAREN EHRET, INTRODUCTION Plaintiff Caren Ehret filed the instant putative class action against Defendant Uber 14 Technologies, Inc., alleging that Defendant violated the California Unfair Competition Law (UCL) 15 and Consumers Legal Remedies Act (CLRA). Docket No. 40 (First Amended Complaint) (FAC). 16 Plaintiff contends that Uber made misrepresentations when it informed consumers that it would 17 automatically charge a 20% “gratuity” when taxi rides were arranged through its app when in fact, 18 Uber kept a substantial portion of the purported “gratuity” for itself. Id. at ¶¶ 11, 13. 19 Plaintiff‟s motion for class certification came on for hearing before the Court on October 8, 20 2015. In her motion, Plaintiff proposed to certify the following class: “All individuals who 21 arranged and paid for taxi rides through Uber‟s service from April 18, 2012 to March 25, 2013.” 22 Docket No. 101 at 3 (Mot.). For the reasons explained before, the Court will certify the following 23 class: “All individuals who received Uber‟s e-mail with the representation that the 20% charge 24 would be gratuity only, who then arranged and paid for taxi rides through Uber‟s service from 25 April 20, 2012 to March 25, 2013.”1 26 1 27 28 The Court is not aware of any e-mails that represented that the 20% charge is gratuity only other than the June 25, 2012 e-mail that was sent from Uber to Chicago residents, including Plaintiff. See Motion, Exh. A. II. 1 2 BACKGROUND Uber provides a software application (Uber app) that permits riders to “summon, arrange 3 and pay for taxi cab rides and other transportation services electronically via their mobile phone.” 4 FAC at ¶ 10. During the proposed class period of April 18, 2012 to March 25, 2013, one of the 5 options available in five cities was “uberTAXI,” which allowed users to request a ride in a 6 traditional taxi cab. Docket No. 106 (Mohrer Dec.) at ¶ 5; Docket No. 107 (Holt Dec.) at ¶ 5; 7 Docket No. 108 (Penn Dec.) at ¶ 6; Docket No. 109 (Abyzov Dec.) at ¶ 5. The uberTAXI option 8 required taxi cab drivers to use their meters as normal, who would then enter the metered fare into 9 the Uber app at the end of the trip. Mohrer Dec. at ¶ 7; Holt Dec. at ¶ 7; Penn Dec. at ¶ 8; Abyzov determine the total amount charged to the rider through the Uber app.2 In some cities, a separate 12 For the Northern District of California Dec. at ¶ 7; Pao Dec. at ¶ 7. Uber would then automatically add 20% of the metered fare to 11 United States District Court 10 booking fee was also charged. Holt Dec. at ¶ 7; Abyzov Dec. at ¶ 8; Pao Dec. at ¶ 7. Beginning 13 on March 25, 2013, Uber no longer automatically added 20% of the metered fare, but either 14 enabled users to adjust the gratuity or required riders to pay the driver directly. Mohrer Dec. at ¶ 15 7; Holt Dec. at ¶ 11; Penn Dec. at ¶ 16; Abyzov Dec. at ¶ 11; Pao Dec. at ¶ 11. 16 At issue are Uber‟s representations as to the 20% automatic charge. FAC at ¶ 11. Plaintiff 17 contends that on Uber‟s website and in various blog posts and e-mails, Uber advertised the 20% 18 automatic charge solely as a “gratuity” for the drivers. See Mot., Exh. A (screenshot of Uber‟s 19 Chicago webpage from December 11, 2012, stating that for taxis, “No need to pay your driver - 20 the metered fare + 20% gratuity will be charged to your credit card on file”), B (Uber blog post 21 from November 28, 2012, stating “Use Uber to request and pay for a taxi, at standard taxi rates. A 22 20% gratuity is automatically added for the driver.”). However, Uber in fact took a fee of 23 approximately 10% of the metered fare, including a 2% credit card processing fee. Mohrer Dec. at 24 25 26 27 28 2 In New York City, the uberTAXI option was available between August 2012 and October 16, 2012. Mohrer Dec. at ¶ 7. In Washington D.C., the uberTAXI option was available between January 2013 and March 25, 2013. Holt Dec. at ¶ 7. In Chicago, the uberTAXI option was available between April 2012 and March 25, 2013. Penn Dec. at ¶ 8. In San Francisco, the uberTAXI option was available between October 2012 and March 25, 2013. Abyzov Dec. at ¶ 7. In Boston, the uberTAXI option was available between September 2012 and March 25, 2013. 2 1 ¶ 8; Holt Dec. at ¶ 8; Penn Dec. at ¶ 10; Abyzov Dec. at ¶ 8; Pao Dec. at ¶ 8. Thus, the driver 2 ultimately received about half of the 20% gratuity charged to riders, with the rest going to Uber. 3 On September 9, 2012, Plaintiff used the uberTAXI option to arrange for a taxi ride in 4 Chicago. FAC at ¶ 15. Plaintiff contends that when she “signed up for [the taxi driver] to come 5 pick [her] up that day, it said 20 percent gratuity to the driver,” with “it” being the app or 6 “whatever [she] was looking at via the app on [her] phone.” Mot., Exh. I (Mot. Ehret Dep.) at 21- 7 22:1. During the ride, Plaintiff asked the driver about the 20% gratuity, to which the driver 8 responded that he actually received only half of the gratuity. Mot. Ehret Dep. at 21:14-21. After 9 her trip, Plaintiff received a receipt that broke down the $15.90 charge as a $13.25 meter fare, and 10 On January 8, 2014, Plaintiff filed the instant putative class action against Uber. Docket 12 For the Northern District of California United States District Court 11 a $2.65 “Gratuity & Service Charge.” Docket No. 105 (Roberts Dec.), Exh. D. No. 1. In her amended complaint, Plaintiff alleges that the representation of a 20% gratuity “is 13 false, misleading, and likely to deceive members of the public,” as “the term „gratuity‟ suggests a 14 sum paid to the driver/owner in recognition of transportation service that is distinct and different 15 from the actual fare.” FAC at ¶ 14. Following this Court‟s ruling on Uber‟s motion to dismiss, 16 the remaining causes of action are for violations of the UCL for unfair, unlawful, and fraudulent 17 business practices, and violations of the CLRA. Docket No. 64 at 22. III. 18 19 20 21 To obtain class action certification, a proposed class must satisfy the prerequisites of Rule 23(a), which are: (1) the class is so numerous that joinder of all members is impracticable; (2) there are questions of law or fact common to the class; (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class; and the representative parties will fairly and adequately protect the interests of the class. 22 23 24 25 DISCUSSION (4) 26 Fed. R. Civ. P. 23(a)(1)-(4). The purpose of these Rule 23(a) requirements is largely to “ensure[] 27 that the named plaintiffs are appropriate representatives of the class whose claims they wish to 28 litigate,” and to “effectively limit the class claims to those fairly encompassed by the named 3 1 plaintiff‟s claims.” Wal-Mart Stores, Inc. v. Dukes, 131 S.Ct. 2541, 2550 (2011) (citation 2 omitted). In addition, “the proposed class must qualify as one of the types of class actions 3 identified in Rule 23(b).” Pulaski & Middleman, LLC v. Google, Inc., 802 F.3d 979, 985 (9th Cir. 4 2015). Here, Plaintiffs seek certification under Rule 23(b)(3), which, in addition to the requisites 5 of Rule 23(a), requires that the Court find “that the questions of law or fact common to class 6 members predominate over any questions affecting only individual members, and that a class 7 action is superior to other available methods for fairly and efficiently adjudicating the 8 controversy.” Fed. R. Civ. P. 23(b)(3). The class action is “an exception to the usual rule that litigation is conducted by and on 9 the burden is on the “party seeking class certification [to] affirmatively demonstrate his 12 For the Northern District of California behalf of the individual named parties only.” Dukes, 11 S.Ct. at 2550 (citation omitted). Thus, 11 United States District Court 10 compliance with the Rule -- that is, he must be prepared to prove that there are in fact sufficiently 13 numerous parties, common questions of law or fact, etc.” Id. at 2551. The court in turn must 14 conduct a “rigorous analysis” to ensure that the prerequisites of Rule 23 are met, which may 15 require “prob[ing] behind the pleadings before coming to rest on the certification question.” Id. 16 (citation omitted). Plaintiff now moves to certify the following class: “All individuals who arranged and paid 17 18 for taxi rides through Uber‟s service from April 18, 2012 to March 25, 2013.” 19 A. Rule 23(a) Criteria 20 1. Ascertainability 21 Before analyzing numerosity under Rule 23(a)(1), the district courts have required a 22 showing that the class to be certified is ascertainable. See Xavier v. Philip Morris USA, Inc., 787 23 F. Supp. 2d 1075, 1089 (N.D. Cal. 2011). Ascertainability requires that the class definition be 24 “definite enough so that it is administratively feasible for the court to ascertain whether an 25 individual is a member” before trial, and by reference to “objective criteria.” Daniel F. v. Blue 26 Shield of Cal., 305 F.R.D. 115, 122 (N.D. Cal. 2014). This requirements makes clear “on whose 27 rights are merged into the judgment, that is, who gets the benefit of any relief and who gets the 28 burden of any loss,” and avoids subsequent litigation “over who was in the class in the first place.” 4 1 2 Xavier, 787 F. Supp. 2d at 1089. In the instant case, neither party addresses ascertainability. However, the class that 3 Plaintiff originally sought to certify would have met this criteria, as the evidence on the record 4 shows that Uber maintains records of customers who used the uberTAXI option. Furthermore, the 5 Court finds that membership in the class being certified here3 is objectively ascertainable from 6 Uber‟s business records. Uber has presumably maintained copies of the promotional e-mails that 7 were sent, judging by Uber‟s ability to produce the e-mails that were sent specifically to Plaintiff 8 in its opposition to the instant motion. See Penn Dec., Exh. C. Thus, the ascertainability 9 requirement is satisfied here. 2. 11 Numerosity A plaintiff satisfies the numerosity requirement if “the class is so large that joinder of all 12 For the Northern District of California United States District Court 10 members is impracticable.” Hanlon v. Chrysler Corp., 150 F.3d 1011, 1019 (9th Cir. 1998) 13 (citation omitted). “While there is no fixed number that satisfies the numerosity requirement, as a 14 general matter, a class greater than forty often satisfies the requirement, while one less than 15 twenty-one does not.” Ries v. Ariz. Beverages USA LLC, 287 F.R.D. 523, 536 (N.D. Cal. 2012). 16 Uber does not suggest that numerosity is not satisfied here. There is also sufficient 17 evidence in the record to suggest that the class being certified will number at least over forty, 18 whether it is the class Plaintiff seeks to certify (all individuals who used the uberTAXI service 19 from April 18, 2012 to March 25, 2013) or the class that the Court will certify (all individuals who 20 received Uber‟s e-mail representation that the 20% charge is gratuity only, and then used the 21 uberTAXI service). During the hearing, Uber explained that Plaintiff would have received Uber‟s 22 e-mails because she subscribed to the e-mail list. Uber did not suggest that a class made up of 23 subscribers who received the allegedly misleading e-mail would not satisfy the numerosity 24 requirement, and it seems likely to the Court that the number of subscribers would number at least 25 over forty. Thus, the Court finds that the numerosity requirement is satisfied. 26 27 28 3 Again, the class being certified is defined as follows: All individuals who received Uber‟s e-mail with the representation that the 20% charge would be gratuity only, who then arranged and paid for taxi rides through Uber‟s service from April 20, 2012 to March 25, 2013. 5 1 3. Commonality 2 In order to satisfy Rule 23(a)(2)‟s commonality requirement, a plaintiff must “affirmatively 3 demonstrate” that their claims depend upon at least one common contention, the truth or falsity of 4 which “will resolve an issue that is central to the validity” of each one of the class members‟ 5 “claims in one stroke.” Dukes, 131 S. Ct. at 2551. Not all questions of fact and law need to be 6 common to satisfy the rule. Instead, the lawsuit must call upon the Court or jury to decide at least 7 one factual or legal question that will generate a common answer “apt to drive the resolution of the 8 litigation.” Id.; see also id. at 2556 (“even a single common question” will suffice to satisfy Rule 9 23(a)) (citation and internal modifications omitted). 10 The Ninth Circuit has found that Rule 23(a)(2)‟s commonality requirement is “limited.” In Mazza v. American Honda Motor Co., the plaintiffs alleged that Honda had misrepresented the 12 For the Northern District of California United States District Court 11 characteristics of a Collision Mitigation Braking System (CMBS) in various advertisements, such 13 as omitting the fact that the CMBS might not warn drivers in time to avoid an accident, and could 14 shut off in bad weather. 666 F.3d 581, 585, 587 (9th Cir. 2012). Honda contended that the 15 plaintiffs could not affirmatively demonstrate a common question of fact or law because the 16 “„crucial question‟ of „which buyers saw or heard which advertisements‟ is not susceptible to 17 common resolution.” Id. at 589 (original italics). However, the Ninth Circuit found that the issue 18 of exposure went to the Rule 23(b)(3) preponderance inquiry, not whether there was at least one 19 significant question of law or fact. Id. Because there were common questions as to whether 20 Honda had a duty to disclose or whether the omitted information was material and misleading, the 21 Ninth Circuit held that the plaintiffs had “satisfied their limited burden under Rule 23(a)(2) to 22 show that there are questions of law or fact common to the class.” Id. 23 Likewise, in Astiana v. Kashi Co., the district court found that commonality was satisfied 24 in a case contending that food products contained deceptive and misleading labeling which 25 violated the UCL and CLRA. 291 F.R.D. 493, 502 (C.D. Cal. 2013). There, the plaintiffs alleged 26 that the defendant had “packaged, marketed, distributed, and sold Kashi food products as being 27 „Nothing Artificial‟ or „All Natural,‟” when in fact the products used certain ingredients or 28 processes that were synthetic. Id. at 498. When requesting class certification, the plaintiffs 6 1 “identified several legal and factual issues common to the putative class‟s claims, including 2 whether the use of the term „Nothing Artificial‟ to advertise food products that contain the 3 allegedly synthetic ingredients violates the UCL [and] CLRA . . . .” Id. at 501. As all class 4 members were exposed to such representations and purchased the food product, there was a 5 “common core of salient facts.” Id. (citation omitted). Defendants‟ argument that differences in 6 the products and the motivations of customers prevented commonality was unavailing, as 7 “[v]ariation among class members in their motivation for purchasing the product, the factual 8 circumstances behind their purchase, or the price that they paid does not defeat the relatively 9 „minimal‟ showing required to establish commonality.” Id. at 502 (citation omitted). Of court found that there would be variation because there was insufficient evidence that consumers 12 For the Northern District of California significance, the court found predominance (rather than commonality) lacking. In particular, the 11 United States District Court 10 or food producers have a “uniform definition” of the term “All Natural” that affects purchasing 13 decisions. Accordingly, reliance could not uniformly be inferred under the predominance prong. 14 Here, Plaintiff alleges twelve common questions of law and fact,4 including, e.g., whether 15 Uber represented that the 20% additional charge was gratuity only. Mot. at 5-6. Uber does not 16 17 18 19 20 21 22 23 24 25 26 27 28 4 The questions as alleged by Plaintiff are: (1) Whether Defendant represented on its website and other marketing materials that gratuity will be automatically added at a set percentage of the metered fare; (2) Whether Defendant kept a portion of the amount that it represented was for gratuity as a hidden fee; (3) Whether Defendant‟s misrepresentations were material under the reasonable consumer standard; (4) Whether Defendant‟s misrepresentations would likely deceive a reasonable consumer; (5) Whether Defendant‟s conduct constituted an unfair business practice in violation of the UCL; (6) Whether Defendant‟s conduct constituted an unlawful business practice in violation of the UCL; (7) Whether Defendant‟s conduct constituted a fraudulent business practice in violation of the UCL; (8) Whether Defendant‟s conduct constitutes a violation of Cal. Civ. Code § 1770(a)(5); (9) Whether Defendant‟s conduct constitutes a violation of Cal. Civ. Code § 1770(a)(9); (10) Whether Defendant‟s conduct constitutes a violation of Cal. Civ. Code § 1770(a)(14); (11) Whether Plaintiff and class members are entitled to damages and the proper measure of such damages; and (12) Whether Defendant should be required to make restitution under the UCL and, if so, the proper measurement of restitution. 7 1 argue that any of the questions identified by Plaintiff are not common to the class. Instead, Uber 2 argues that there are too many dissimilarities and individualized issues, including whether 3 individuals in the class saw any representation about the 20% gratuity, which of the 4 representations the individual saw and whether the individual considered that representation 5 material. Opp. at 7. As the Ninth Circuit held in Mazza, these concerns are more appropriately 6 considered under Rule 23(b)(3)‟s predominance, rather than commonality analysis. See Mazza, 7 666 F.3d at 589; Astiana v. Kashi Co., supra. The common questions regarding, e.g., whether 8 Uber made the alleged misrepresentation, and if so, whether those misrepresentations are material 9 and likely to deceive a reasonable consumer are apt to drive the resolution of Uber‟s liability, 10 affecting the entire class. Thus, commonality is satisfied here.5 4. 12 For the Northern District of California United States District Court 11 Typicality In determining typicality, the Court “looks to whether the claims of the class 13 representatives are typical of those of the class, and is satisfied when each class member‟s claim 14 arises from the same course of events, and each class member makes similar legal arguments to 15 prove the defendant‟s liability.” Stearns, 655 F.3d at 1019. Furthermore, “[u]nder the rule‟s 16 permissive standards, representative claims are „typical‟ if they are reasonably co-extensive with 17 those of absent class members; they need not be substantially identical.” Hanlon, 150 F.3d at 18 1020. 19 In Astiana, the district court found that typicality was satisfied despite defendant‟s 20 arguments that the plaintiffs‟ “perception and knowledge about Kashi products, as well as 21 differences in their preferences and reasons for purchasing Kashi products, render them atypical of 22 the proposed classes.” 291 F.R.D. at 502. The district court found that under the typicality test, 23 “the focus should be on the defendants‟ conduct and the plaintiffs‟ legal theory, not the injury 24 caused to the plaintiff.” Id. (citation omitted). With respect to the UCL and CLRA claims, the 25 district court explained: 26 5 27 28 We should note that even if individual variations as to whether individual class members saw any representation were relevant to the commonality rather than predominance, for the reasons stated below those asserted variablities are not sufficient to defeat commonality as to the class certified herein. 8 1 2 3 4 individual experience with a product is irrelevant because the injury under the UCL [and] CLRA is established by an objective test. Specifically, this objective test states that injury is shown where the consumer has purchased a product that is marketed with a material misrepresentation, that is, in a manner such that members of the public are likely to be deceived. 5 Id. There was no requirement “that the representations were the only cause, or „even the 6 predominant or decisive factor,‟ influencing their conduct.” Id. (citing In re Tobacco II Cases, 46 7 Cal.4th 298, 326-27 (2009). The mere fact that the plaintiffs considered other factors in 8 purchasing the products with deceptive labeling did not automatically make the plaintiffs 9 “atypical.” Id. at 503. In short, it was sufficient that the plaintiffs alleged the same type of economic injury and sought the same type of damages as the putative class members. Id. at 502. 11 Uber challenges typicality on two grounds. First, Uber contends that Plaintiff is atypical 12 For the Northern District of California United States District Court 10 because there are many variations in the proposed class, such as putative class members who never 13 saw Uber‟s 20% gratuity representation, members who used uberTAXI for different reasons than 14 Plaintiff, and members who would not care that Uber did not provide the full 20% gratuity to the 15 drivers. Opp. at 22. For purposes of typicality, these distinctions are not relevant. The issue is 16 not Plaintiff‟s individual experience with uberTAXI, but the objective test of whether Uber made 17 material misrepresentations likely to deceive members of the public. See Astiana, 291 F.R.D. at 18 502. This is because under the UCL, “it is necessary only to show that members of the public are 19 likely to be deceived.” In re Tobacco II Cases, 46 Cal. 4th at 312 (citations omitted) (emphasis 20 added). Similarly, the CLRA requires a deceptive practice that causes harm, and such causation 21 can be demonstrated through the reasonable man test. In re Vioxx Class Cases, 180 Cal. App. 4th 22 116, 129 (2009). Here, Plaintiff contends that she took an uberTAXI, which was marketed with 23 the allegedly material misrepresentation that the 20% charge would go to the driver, when in fact 24 Uber took nearly half of that amount. Whatever her subjective reasons or motivations (affecting 25 her decision to take the ride), her general claim challenges Uber‟s conduct under an objective test 26 and is sufficiently co-extensive with the remainder of the class to satisfy typicality. 27 Second, Uber argues that Plaintiff is subject to a unique defense because on April 18, 28 2012, prior to her taking uberTAXI, Plaintiff received an e-mail that explicitly stated that “[a] 20% 9 1 charge to cover gratuity and service fees will automatically be added to the fare.” Penn Dec., Exh. 2 C (emphasis added). Thus, Uber contends that Plaintiff has no claim because the allegedly hidden 3 practice was fully disclosed to her. Opp. at 22. The Court rejects this argument. While Plaintiff 4 did receive an e-mail stating that the 20% charge covered both gratuity and service fees, she 5 subsequently received an e-mail on June 25, 2012, which stated “No need to pay your driver - the 6 metered fare + 20% gratuity will be charged to your credit card on file.” Mot., Exh. A. Moreover, 7 Plaintiff stated in her deposition that when she signed up for the taxi driver to pick her up, 8 “whatever [she] was looking at via the app on [her] phone” “said 20 percent gratuity to the driver.” 9 Mot. Ehret Dep. at 21:21-22:1. In short, even though Plaintiff may have received the correct that the 20% charge was only gratuity for the driver. Thus, Plaintiff‟s claim is substantially 12 For the Northern District of California information at one point, it was then allegedly followed by the allegedly materially false statement 11 United States District Court 10 similar to those of other class members who received only the misleading email and may have 13 been exposed to the Uber website and blog posts. 14 Cases cited by Uber to the contrary are distinguishable. In Harris v. Las Vegas Sands 15 L.L.C., the court found that a hotel website which explicitly disclosed at the time of the transaction 16 that the “Grand Total” cost did not include an applicable daily resort fee was not false or 17 misleading as a matter of law. No. CV-12-10858 DMG (FFMx), 2013 WL 5291142, at *5 (C.D. 18 Cal. Aug. 16, 2013). Likewise, in South Bay Chevrolet v. General Motors Acceptance Corp., the 19 court rejected a UCL claim that was premised on the defendant‟s failure to disclose the use of a 20 particular method to calculate interest because the plaintiff‟s business manager, who was in charge 21 of wholesale floor plan financing, already knew that the method would be used. 72 Cal. App. 4th 22 861, 874, 878, 889-890 (1999). In both cases, the plaintiff knew or should have known the 23 information that they claimed had been misleadingly omitted. However, in neither case did the 24 defendants subsequently provide contradictory and allegedly incorrect information to the 25 plaintiffs, as is the case here when Uber later sent Plaintiff an e-mail stating that the 20% 26 automatic charge was for gratuity, not for gratuity and service fees. 27 28 Plaintiff therefore satisfies the typicality requirement, both for her proposed class and that which will be certified by the Court. However, as discussed in Section III.B.1.a., Plaintiff‟s 10 1 proposed class has a problem of predominance, namely the absence of proof that the entire 2 proposed class would have been exposed to the allegedly misleading statement that the 20% 3 automatic charge was for gratuity only. 4 5. Adequacy 5 The adequacy requirement looks at whether the putative class member will “fairly and 6 adequately protect the interests of the class.” Fed. R. Civ. P. 23(a)(4). A named plaintiff satisfies 7 the adequacy test if the individual has no conflicts of interest with other class members and if the 8 named plaintiff will prosecute the action vigorously on behalf of the class. See Ellis v. Costco 9 Wholesale Corp., 657 F.3d 970, 985 (9th Cir. 2011). The parties do not dispute this issue, and no questions of credibility or any conflicts of interest, and Plaintiff does not propose to waive any 12 For the Northern District of California there is no evidence that Plaintiff is not an adequate class representative. For example, there are 11 United States District Court 10 elements of damage on behalf of the class to the detriment of other class members. Plaintiff‟s 13 counsel is also adequate, and has significant experience in similar class actions, including several 14 consumer class actions. See Mot., Exh. L. Uber does not challenge Plaintiff or Plaintiff‟s counsel 15 on adequacy grounds, and the Court is satisfied that Plaintiff and her counsel have and will 16 continue to vigorously prosecute the instant action. The Court finds that Plaintiff satisfies the 17 adequacy requirement. 18 B. 19 Rule 23(b)(3) Having satisfied the Rule 23(a) inquiry, Plaintiff must next show that the proposed class 20 claim meets the requirements of Rule 23(b), which requires the Court to determine that common 21 questions of law and fact predominate over individualized issues, and that class adjudication is 22 superior to individual litigation of the Plaintiff‟s claims. See Fed. R. Civ. P. 23(b)(3). 23 1. Predominance 24 “Rule 23(b)(3)‟s predominance criterion is even more demanding than Rule 23(a).” 25 Comcast Corp. v. Behrend, 133 S. Ct. 1426, 1432 (2013); see also Astiana, 291 F.R.D. at 504 26 (“The predominance analysis under Rule 23(b) is more stringent than the commonality 27 requirement of Rule 23(a)(2).”). It is not enough simply to “establish that common questions of 28 law or fact exist, as it is under Rule 23(a)(2)‟s commonality requirement. The predominance 11 1 inquiry under Rule 23(b) is more rigorous as it tests whether proposed classes are sufficiently 2 cohesive to warrant adjudication by representation.” Id. (citation omitted). The Ninth Circuit has 3 found that “there is a clear justification for handling the dispute on a representative rather than an 4 individual basis if common questions present a significant aspect of the case and they can be 5 resolved for all members of the class in a single adjudication.” Mazza, 666 F.3d at 589. In short, 6 “the predominance analysis under Rule 23(b)(3) focuses on the relationship between the common 7 and individual issues in the case, and tests whether the proposed class is sufficiently cohesive to 8 warrant adjudication by representation.” Abdullah v. U.S. Sec. Assocs., 731 F.3d 952, 964 (9th 9 Cir. 2013). 10 UCL Claim Under the UCL, “there are three varieties of unfair competition: practices which are 12 For the Northern District of California United States District Court 11 a. unlawful, unfair or fraudulent.” In re Tobacco II Cases, 46 Cal. 4th at 311. “To state a claim 13 under the UCL . . . „based on false advertising or promotional practices, it is necessary only to 14 show that members of the public are likely to be deceived.‟” Pulaski & Middleman, LLC, 802 15 F.3d 979, 985 (quoting In re Tobacco II Cases, 46 Cal. 4th at 312). The Ninth Circuit has 16 recognized that where plaintiffs are „deceived by misrepresentations into making a purchase, the 17 economic harm is the same: the consumer has purchased a product that he or she paid more for 18 than he or she otherwise would have had it been labeled accurately; thus, where a violation of the 19 UCL is found, the consumer may recover restitution which is based on what a purchaser would 20 have paid at the time of purchase if the purchaser received all the information. Id. at *7 (quoting 21 Kwikset Corp. v. Superior Court, 51 Cal. 4th 310, 329 (2011)). 22 The “representative plaintiff need not prove that members of the public were actually 23 deceived by the practice, relied on the practice, or suffered damages.” Davis-Miller v. Auto. Club 24 of S. Cal., 201 Cal. App. 4th 106, 121 (2011). While individualized proof of deception, reliance, 25 and injury is not required to seek relief under the UCL, “the question of likely deception does not 26 automatically translate into a class-wide problem,” such as when there is variation in whether class 27 members were actually exposed to the challenged business practices. Berger v. Home Depot USA, 28 Inc., 741 F.3d 1061, 1068 (9th Cir. 2014). 12 1 Here, Uber argues that predominance cannot be established because a UCL claim requires 2 that members of the proposed class be exposed to the allegedly false advertising, and Plaintiff‟s 3 proposed class “includes individuals who were never exposed to any representation about the 20% 4 charge.” Opp. at 7. Both the Ninth Circuit and California courts have expressly found that “class 5 certification of UCL claims is available only to those class members who were actually exposed to 6 the business practice at issue.” Berger, 741 F.3d at 1068 (emphasis added); Davis-Miller, 201 7 Cal. App. 4th at 121 (“we do not understand the UCL to authorize an award for injunctive relief 8 and/or restitution on behalf of a consumer who was never exposed in any way to an allegedly 9 wrongful business practice”) (citation omitted). Thus, “when the class action is based on alleged required to determine whether the representations at issue were actually made to each member of 12 For the Northern District of California misrepresentations, a class certification denial will be upheld when individual evidence will be 11 United States District Court 10 the class.” Davis-Miller, 201 Cal. App. 4th at 121 (citation omitted) (emphasis added). 13 On the other hand, in numerous cases involving claims of false-advertising, class-wide 14 exposure has been inferred because the alleged misrepresentation is on the packaging of the item 15 being sold. In such a case, given the inherently high likelihood that in the process of buying the 16 product, the consumer would have seen the misleading statement on the product and thus been 17 exposed to it, exposure on a classwide basis may be deemed sufficient. See Astiana, 291 F.R.D. at 18 500; see also Wolph v. Acer Am. Corp., 272 F.R.D. 477, 488 (N.D. Cal. 2011). 19 The issue here is whether class-wide exposure can be inferred where Uber‟s alleged 20 misrepresentations regarding the 20% gratuity were primarily on its website, blog, and e-mail 21 messages, rather than on the Uber app itself. Plaintiff did not dispute during the hearing on this 22 matter that the Uber app lacks the alleged misrepresentation. See also Mohrer Dec. at ¶ 11; Holt 23 Dec. at ¶ 11; Penn Dec. at ¶ 17; Abyzov Dec. at ¶ 12; Pao Dec. at ¶ 12. Hence, this case is not like 24 the product labeling cases. 25 Nonetheless, class-wide exposure can be inferred outside of product labeling cases where 26 there is an extensive advertising campaign. In In re Tobacco II Cases, the California Supreme 27 Court found that reliance on misrepresentations about the health hazards of cigarette smoking 28 could be presumed because there was evidence of a “decades-long campaign of the tobacco 13 1 industry to conceal the health risks of its product while minimizing the growing consensus 2 regarding the link between cigarette smoking and lung cancer and, simultaneously, engaging in 3 saturation advertising targeting adolescents, the age group from which new smokers must come.” 4 46 Cal. 4th at 327. The California Supreme Court concluded that in light of this “long-term 5 advertising campaign, the plaintiff is not required to plead with an unrealistic degree of specificity 6 that the plaintiff relied on particular advertisements or statements.” Id. at 328. 7 In subsequent cases, however, the courts have not been willing to assume class-wide 8 exposure based simply on an advertising campaign. In Mazza, the plaintiff alleged that Honda‟s 9 advertising for the CMBS misrepresented the CMBS‟s characteristics and omitted material product brochure, television commercials describing the system‟s operation -- including one that 12 For the Northern District of California information on its limitations. 669 F.3d at 585. Honda‟s advertising campaign included a 2006 11 United States District Court 10 ran for a week in November 2005 and another that ran from February to September 2006 -- and a 13 print ad in some magazines from March to September 2006. Id. at 586. When Honda ceased mass 14 advertising, it continued smaller-scale market efforts that included two intranet commercials that 15 were viewable on kiosks at Acura dealerships, which dealers were encouraged to show to potential 16 customers. Id. Honda also operated an “Owner Link” website that contained video clips 17 describing the CMBS system, and was available to all customers. Id. at 587. Finally, the Acura 18 Style magazine, a periodical sent to Acura dealerships, subscribing Acura owners, and interested 19 customers, ran an article on the CMBS in 2007. Id. 20 The Ninth Circuit concluded that this level of advertising did not “justify a presumption of 21 reliance . . . because it is likely that many class members were never exposed to the allegedly 22 misleading advertisements, insofar as advertising of the challenged system was very limited.” Id. 23 at 595. While the Ninth Circuit acknowledged that the Tobacco II decision had “reconfirmed that 24 class members do not need to demonstrate individualized reliance,” it explained that this “holding 25 was in the context of a „decades-long‟ tobacco advertising campaign where there was little doubt 26 that almost every class member had been exposed to defendants‟ misleading statements, and 27 defendants were not just denying the truth but representing the opposite.” Id. at 595-96. In 28 contrast, “Honda‟s product brochures and TV commercials fall short of the extensive and long14 1 term fraudulent advertising campaign at issue in Tobacco II, and this difference is meaningful.” 2 Id. at 596 (citation omitted). The court concluded that “[f]or everyone in the class to have been 3 exposed to the omissions . . . it is necessary for everyone in the class to have viewed the allegedly 4 misleading advertising.” Id. However, because of the limited scope of the advertising, it was 5 “unreasonable to assume that all class members viewed it.” Id. Thus, “[i]n the absence of the 6 kind of massive advertising campaign at issue in Tobacco II, the relevant class must be defined in 7 such a way as to include only members who were exposed to advertising that is alleged to be 8 materially misleading.” Id. 9 Similarly, the district court in In re Clorox Consumer Litigation declined to certify a class 439 (N.D. Cal. 2014). Clorox had a marketing campaign that allegedly misrepresented that Fresh 12 For the Northern District of California action in connection with the marketing and advertising of Fresh Step cat litter. 301 F.R.D. 436, 11 United States District Court 10 Step‟s carbon formula was more effective at eliminating odors than other products, which included 13 television commercials that ran for a total of sixteen months. Id. at 439, 444. However, Clorox 14 produced evidence that the advertising campaign was not effective, as an advertising analytics 15 company had concluded that “not enough people are seeing, or possibly remembering, the 16 advertising.” Id. at 444. Notably, even when the plaintiffs argued that the misleading statement 17 appeared on the Fresh Step packaging itself, the district court found insufficient exposure because 18 the performance claim “appeared only on the back of some [i.e., not all] Fresh Step packaging 19 during the proposed class period.” Id. (original emphasis). Clorox further produced evidence that 20 only 11% of consumers read the back panel of cat litter packaging. Id. As the proposed class had 21 to be limited “to include only persons exposed [to] the allegedly misleading advertisements,” the 22 proposed class that included all purchasers of Fresh Step was overbroad. Thus, the district court 23 concluded that issues common to all class members would not predominate over individualized 24 issues. Id. at 446. 25 In Cohen v. DirecTV, Inc., the plaintiff alleged that he was induced into purchasing High 26 Definition (HD) television services in reliance on DirecTV‟s false advertising. 178 Cal. App. 4th 27 966, 969 (2009). In support of his motion to certify a class of all United States residents who 28 subscribed to DirecTV‟s HD Programming Package, the plaintiff presented evidence of print 15 1 advertising and promotional materials. Id. The Court of Appeal upheld the trial court‟s denial of 2 class certification on the ground that common issues of fact did not predominate because the class 3 included subscribers who never saw DirecTV‟s advertisements before purchasing the company‟s 4 HD services, such as customers who decided to purchase the HD package based on word of mouth 5 or because they saw the HD package in a store or at another person‟s house. Id. at 979. Because 6 the UCL did not authorize an award for injunctive relief or restitution on behalf of consumers who 7 were never exposed to the allegedly wrongful business practice, the motion for class certification 8 failed. Id. at 980. 9 Here, Plaintiff contends that exposure can be inferred in the instant case because there was misrepresentation was targeted towards its intended audience. Docket No. 114 (Reply) at 7. 12 For the Northern District of California a single, uniform misrepresentation by Uber that the 20% charge was gratuity, and that the 11 United States District Court 10 Plaintiff relies primarily on Makaeff v. Trump University, in which a district court found sufficient 13 evidence of class-wide exposure based on an advertising campaign.6 14 In Makaeff, the plaintiffs alleged that the defendants “made false representations in 15 advertisements, mailings and programs regarding Donald Trump‟s involvement in TU [Trump 16 University] and the contents of the programs that students would receive.” No. 3:10-cv-0940- 17 6 18 19 20 21 22 23 24 25 26 27 28 During the hearing on this motion, Plaintiff also cited McAdams v. Monier, Inc., 182 Cal. App. 4th 174 (2010). However, McAdams did not discuss exposure, except to state that with respect to defining the class, “[t]he definition of the CLRA and UCL classes is subject to the following proviso: The members of these classes, prior to purchasing or obtaining their Monier roof tile product, had to have been exposed to a statement along the lines that the roof tile would last 50 years, or would have a permanent color, or would be maintenance-free.” Id. at 192. The Court of Appeal did not suggest that exposure could be inferred based on the pervasiveness of an advertising campaign, but specifically added a requirement of exposure: it certified the class with the proviso that the class would be limited to people who were exposed. To the extent that the court discussed the existence of “a single material misrepresentation to class members,” it was in regard to reliance under the CLRA. See id. at 184. Similarly, Plaintiff‟s other citations are distinguishable. Both Brown v. Hain Celestial Group, Inc., No. C-11-03082 LB, 2014 WL 6483216 (N.D. Cal. Nov. 18, 2014), and McCrary v. Elations Co., LLC, No. EDCV 13-00242 JGB (OPx), 2014 WL 1779243 (C.D. Cal. Jan. 13, 2014), concerned situations where the misleading statements were on the packaging of the product itself. Thus, exposure could easily be inferred. See Brown, 2014 WL 6483216, at *2 (product packaging identified it as “organic”); McCrary, 2014 WL 1779243, at *13 (“a presumption of exposure is inferred where, as here, the alleged misrepresentations were on the outside of the packing of every unit for an extended period”). As noted above, exposure has often been found where the misrepresentation is on product packaging, a situation distinguishable from the case at bar. 16 represented included quotes such as “I can turn anyone into a successful real estate investor, 3 including you” and “I‟ll show you how,” as well as “76% of the world‟s millionaires made their 4 fortunes in real estate . . . I‟m ready to teach you how to do it too.” Id. at *3. Print advertisements 5 and letters were “signed” by Mr. Trump, and informed prospective customers that “they would be 6 shown real estate strategies by Mr. Trump‟s „hand-picked experts.‟” Id. Specifically, TU used an 7 “orchestrated outreach campaign utilizing mailed invitations as well as a TU website, Facebook 8 page, radio, and newspaper advertising.” Id. at *3. The materials uniformly referred to the 9 business as “Trump University,” and uniformly claimed that Mr. Trump was “integrally involved 10 in the teaching of students at Trump University.” Id. The plaintiffs also alleged that “TU relied 11 on free introductory previews throughout the United States,” the goal of which was to up-sell 12 For the Northern District of California GPC-WVG, 2014 WL 688164, at *1 (S.D. Cal. Feb. 21, 2014). For example, the advertisements 2 United States District Court 1 attendees to a $1,495 Fulfillment Seminar, which promised a three-day seminar and one full year 13 of expert interactive support. Id. However, the goal of the Fulfillment Seminar was in fact to up- 14 sell participants to the $34,995 Trump Gold Elite Program, which in turn promised the unlimited 15 mentoring for an entire year. Id. at *3-4. Plaintiffs alleged that the TU instructors were not hand- 16 picked by Mr. Trump, and that the Trump Gold Elite Program informed mentors that mentors 17 would not be paid for more than six one-hour mentoring sessions per consumer. Id. at *4. Each 18 of the Plaintiffs alleged that they purchased the Fulfillment Seminar and/or Trump Elite program 19 “after exposure to representations made at the free preview,” and that this experience was “typical 20 of the proposed class.” Id. at *4. When the plaintiffs sought to certify a class action for claims 21 under the UCL‟s fraud prong, the defendants argued that there would need to be an individualized 22 inquiry because “there were no scripts or uniform promotional materials containing any material 23 misrepresentation.” Id. at *12. The district court rejected this argument. While the court 24 acknowledged that the advertising and promotional activities were not part of a massive 25 advertising campaign, it found that “unlike the limited advertising in Mazza, there is evidence that 26 the TU multi-media promotional campaign was uniform, highly orchestrated, concentrated and 27 focused on its intended audience. While it was not a long-term campaign as in Tobacco II, it was 28 much more targeted, concentrated, and efficient than Tobacco II.” Id. at *13. Thus, “[t]he effect 17 1 of this campaign was to make it highly likely that each member of the putative class was exposed 2 to the same misrepresentations[, and t]here is substantial evidence that class members paid for TU 3 seminars for reasons that track the advertising and promotional information provided in the highly 4 orchestrated campaign.” Id. Even the name “Trump University” was misleading, as it suggested 5 that TU was an accredited university and that students would be taught by professors and mentors 6 hand-picked by Mr. Trump, neither of which was the case. Id. at *12. 7 Here, the Court agrees with Plaintiff that there was a uniform and consistent 8 misrepresentation throughout the class period. While Uber argues that there were other 9 advertisements and statements describing the 20% gratuity as other than just gratuity, the Court 10 First, Uber points to advertisements and statements which did describe the 20% charge as a 12 For the Northern District of California United States District Court 11 finds that each of these arguments fail. gratuity and service charge. As evidence, Uber produces an April 18, 2012 e-mail, and April 19, 13 2012 e-mail, and an April 18, 2012 blog post which state that the 20% charge covers gratuity and 14 service fees. See Penn Dec., Exhs. B-D. These statements cover only the first two days Uber 15 offered its taxi service in Chicago (prior to the commencement of the class period certified here). 16 There is no evidence that after these first two days, Uber ever advertised that the 20% charge was 17 for anything but gratuity. Furthermore, for the same reasons that typicality is not defeated, the fact 18 that Uber accurately described the 20% charge for two days does not preclude a UCL and CRLA 19 claims based on subsequent information which contained contrary misleading representations. 20 The fact that for a mere two days, Uber stated that the 20% charge covered both gratuity and 21 service fees does not negate the uniform and consistent misrepresentation thereafter throughout the 22 class period.7 23 Second, Uber argues that the e-mailed receipts sent to uberTAXI users identified the 20% 24 charge as a “gratuity and service charge.” Opp. at 16 (emphasis added). Thus, all uberTAXI 25 users would have been exposed to the correct information, contradicting the allegedly misleading 26 27 28 7 The class period does not include the first two days of Uber‟s taxi service; Plaintiff has provided no evidence that allegedly misleading advertisement was disseminated to the class during these two days. 18 1 statement that the 20% charge was gratuity only. But the fact that the post-trip receipts stated that 2 the 20% charge included both gratuity and a service fee are immaterial with respect to class 3 exposure. Simply put, these post-trip receipts came after the customer had already taken the trip, 4 and would certainly have not informed customers about the true nature of the 20% charge prior to 5 the trip, when they decided to use the uberTAXI service. Finally, Uber argues that taxi drivers gave riders different information during the trip about 6 7 the nature of the 2006 charge. But this is likewise immaterial as again, that information would 8 come after the customer already used the Uber app to request a taxi ride. Uber‟s reliance on 9 Berger, which concerned Home Depot‟s 10% damage waiver surcharge for tool rentals, is to decline the surcharge by signs posted in the stores, sales associates, and the language of the 12 For the Northern District of California misplaced. 741 F.3d at 1064. There, Home Depot argued that customers were told of their ability 11 United States District Court 10 final sales agreement. Id. at 1066. While the Ninth Circuit did not explicitly state, it seems 13 reasonable that for these disclaimers to have any impact on the customer‟s decision, it would have 14 had to come prior to the transaction having occurred. Here, by the time the taxi driver informed a 15 rider that the 20% charge was not just for gratuity, the rider would have already used the Uber app 16 to hail a taxi, creating a transaction that the rider was obligated to pay for. Even if the rider 17 immediately cancelled the trip, he or she would still be subject to dispatch fees or a cancellation 18 fee. Thus, like the post-trip receipt, disparate information by taxi drivers do not defeat Plaintiffs‟ 19 claim that there was evidence of a uniform and consistent misrepresentation throughout the class 20 period. 21 However, apart from these issues, the Court finds that although there may have been a 22 consistent misrepresentation, there is insufficient evidence that all customers during the class 23 period were likely exposed to the misrepresentation. Plaintiff cannot show that Uber advertised 24 the 20% gratuity in a manner such that there is “little doubt that almost every class member had 25 been exposed” to the misrepresentation, Mazza, 669 F.3d at 595-96, or that it was “highly likely” 26 that each class member was so exposed. Makaeff at *13. 27 28 Plaintiff provides evidence that Uber allegedly misrepresented the 20% charge as gratuity on its website and blog posts. See Mot., Exhs. A-B. But this falls short of the “decades-long” 19 1 advertising campaign in Tobacco II, or the highly targeted advertising campaign in Makaeff, 2 which not only included advertisements and mailings but free introductory previews which were 3 dedicated to up-selling attendees on more expensive programs. In contrast, Uber‟s advertisements 4 on its website and blog posts here are comparable to that in Mazza which included television 5 commercials, print ads, website information, and intranet commercials that were to be shown to 6 directly to potential customers at the dealership, in In re Clorox Litigation which included a 7 television commercial ad that ran for sixteen months, and in Cohen which included print 8 advertising and promotional materials. In each of these cases, as well as the instant case, there is 9 no evidence that it was “highly likely” all members of the proposed class saw the allegedly may have downloaded the Uber app based on word of mouth, or used the uberTAXI service 12 For the Northern District of California misleading statements made in the advertisements. This is especially true here, where individuals 11 United States District Court 10 because they were previous Uber users who saw that there was a new option on the Uber app and 13 thus never visited the Uber website or blog posts. The lack of classwide exposure is suggested by 14 the e-mail complaints that Uber provides, several of which express surprise that tip is being 15 charged at all given that other Uber services do not charge for tip. See Roberts Dec., Exh. A at 26, 16 38, 75. The burden was on Plaintiff to prove sufficient exposure. See Mazza, 666 F.3d at 588. To 17 the extent Plaintiff seeks to include in the class all customers who may have been exposed to the 18 website and blog posts, Plaintiff failed to carry that burden. 19 At the hearing, Plaintiff proposed that a smaller class could be certified, comprised of 20 individuals who actually visited Uber‟s website or received the e-mail with the alleged 21 misrepresentation. With respect to the website, the Court finds that there is still insufficient 22 evidence of exposure. Just because the information was available on the website does not 23 necessarily imply that visitors would likely have seen it, especially when there was a good deal of 24 other information on the website. The 20% gratuity representation was on the top right corner 25 describing the various vehicle types, and in the Frequently Asked Questions portion of the 26 webpage, at the bottom left corner. It was not highlighted or especially set off to ensure that 27 visitors would see it. Instead, the website included a good deal of other information about 28 UberBLACK and UberSUV, including pricing information, flat rates, and sample fares for 20 1 UberBLACK and UberSUV only -- none of which involved uberTAXI and the 20% gratuity. 2 Furthermore, because individuals had various reasons for visiting Uber‟s website, wholly separate 3 from obtaining information about uberTAXI, this also decreases the likelihood that visitors would 4 have seen the 20% gratuity representation which pertained to uberTAXI only. Website visitors 5 focused on obtaining pricing information about UberBLACK and UberSUV may have 6 concentrated solely on those sections rather than exploring the rest of the webpage. Similarly, the 7 blog post found on secondary pages of the website was only one of many blog posts, covering a 8 whole range of topics including job announcements, business profiles, health advisories, and 9 appreciation events, in addition to promotions and advertisements. In short, there was a large Significantly, Plaintiff presents no evidence of the likelihood that someone visiting the website or 12 For the Northern District of California amount and wide variety of information on the blog, with only a few posts discussing uberTAXI. 11 United States District Court 10 blog would stay long enough to read the information or posts related to uberTAXI and the 20% 13 gratuity representation, instead requiring the Court to speculate on the likelihood of exposure. 14 Given this absence of any evidence of likely consumer behavior and the lack of any basis to 15 engage in assumptions which under the facts of this case appear speculative, the Court finds that 16 the website and blog are comparable to In re Clorox, in which the misleading statement made on 17 the back of some of the boxes was found insufficient to establish the requisite consumer exposure. 18 However, the Court will certify a class of individuals who received e-mails advertising 19 uberTAXI which included the alleged misrepresentation that the 20% charge was for gratuity only. 20 Unlike the website, the e-mail specifically and heavily promoted the uberTAXI service; its focus 21 only on uberTAXI was not diluted by information about UberBLACK and UberSUV. The email 22 featured three bullet points expressly stating that “the metered fare + 20% gratuity will be 23 charged” to the rider. Those customers who received the email were highly likely to have seen 24 and been exposed to the alleged misrepresentation about the 20% tip. That likelihood is enhanced 25 by the potential additional exposure to the website and blog posts (which while alone do not create 26 sufficient exposure, adds to the exposure by email recipients). For those who received the emails, 27 sufficient classwide exposure can thus be inferred as in Tobacco II and Makaeff. Accordingly, for 28 purposes of Plaintiff‟s UCL claim, the Court will certify this limited class. 21 b. 1 2 CLRA Claim Like the UCL claim, the CLRA requires “at a minimum, that the class be exposed to the 3 allegedly false advertising at issue . . . .” Davis-Miller, 201 Cal. App. 4th at 124-25. As there is 4 insufficient evidence of class-wide exposure, Rule 23(b)(3)‟s predominance requirement cannot be 5 satisfied for the CLRA claim, with the exception of the limited class identified above. 6 In addition to exposure, unlike the UCL claim, the CLRA claim requires “an additional 7 showing of reliance.” Id. at 125; see also Stearns, 655 F.3d at 1022. However, reliance can be 8 established on a class-wide basis by materiality. In short, “[i]f the trial court finds that material 9 misrepresentations have been made to the entire class, an inference of reliance arises as to the class.” In re Vioxx Class Cases, 180 Cal. App. 4th at 129. In California, materiality is typically 11 achieved by applying a “reasonable man” test, in which: 12 For the Northern District of California United States District Court 10 a misrepresentation is deemed material if a reasonable man would attach importance to its existence or nonexistence in determining his choice of action in the transaction in question, and as such materiality is generally a question of fact unless the fact misrepresented is so obviously unimportant that the jury could not reasonably find that a reasonable man would have been influenced by it. 13 14 15 16 Steroid Hormone Prod. Cases, 181 Cal. App. 4th 145, 157 (2010) (internal quotations omitted). 17 See Astiana, 291 F.R.D. at 504 (“The causation required by the CLRA does not make plaintiffs‟ 18 claims unsuitable for class treatment because causation as to each class member is commonly 19 proved more likely than not by materiality.”) (citations and internal modifications omitted). 20 Given the reliance under CLRA turns on materiality which is judged by an objective 21 reasonable person standard, proof focuses on Uber‟s conduct which applied to the entire class and 22 can be determined relative to the class as a whole. Common issues thus predominate.8 c. 23 24 25 Arbitration Clause Uber contends that in the alternative, the class cannot be certified because there would need to be an individualized inquiry as to whether the individual class members are bound by an 26 27 28 8 Although Uber challenges the evidence (or lack thereof) of reliance, even as to Plaintiff‟s individual circumstance), that goes to the merits of the issue of reliance/materiality, not to whether common issues predominate for Rule 23(b)(3) purposes. 22 two district courts have found that the presence of an arbitration clause does not create a 3 predominance of individual issues. In Mora, the magistrate judge found that “[t]he possibility that 4 Harley may seek to enforce agreements to arbitrate with some of the putative Class members does 5 not defeat class certification.” Mora v. Harley-Davidson Credit Corp., No. 1:08-cv-01453-AWI- 6 BAM, 2012 WL 1189769, at *13 (E.D. Cal. Apr. 9, 2012), report and recommendation adopted, 7 2012 WL 3245518 (E.D. Cal. Aug. 7, 2012). This was because at the class certification stage, the 8 burden was not on the plaintiff to demonstrate that “Harley lacks any individual defense as to 9 every Class member.” Id. Likewise, in Herrera, the district court held that “[t]he fact that some 10 members of a putative class may have signed arbitration agreements or released claims against a 11 defendant does not bar class certification.” Herrera v. LCS Fin. Servs. Corp., 274 F.R.D. 666, 681 12 For the Northern District of California arbitration clause, which was added for Uber app users in September 2012. Opp. at 21. Notably, 2 United States District Court 1 (N.D. Cal. 2011). 13 Here, whether an absent class member is bound by the arbitration clause is a question that 14 can be dealt with on a class-wide basis, as it does not appear that there will need to be an 15 individualized inquiry as to whether the arbitration clause is generally enforceable. In O’Connor, 16 the Court did not certify a class of individuals who signed the 2014 and 2015 agreements because 17 a finding of procedural unconscionability under Gentry v. Superior Court, 42 Cal. 4th 443 (2007) 18 appeared to require an individual inquiry into the economic means of the driver and the 19 circumstances under which he or she accepted the agreement. Such an individualized inquiry is 20 not required to find procedural unconscionability here, where the arbitration agreement was a 21 contract of adhesion with no opt-out provision. Instead, Uber can, as it has in the O’Connor 22 litigation, bring a motion to compel absent class members that it contends is bound by the 23 arbitration clause. There does not appear to be any individualized variation that would prevent a 24 resolution (one way or the other) common to the class. The Court therefore finds that the 25 arbitration clause does not result in an individualized issue predominating over the common 26 questions of law and fact present in this case. 27 2. Superiority 28 In addition to predominance, Plaintiff must show that “a class action is superior to other 23 1 available methods for fairly and efficiently adjudicating the controversy.” Fed. R. Civ. P. 2 23(b)(3). With respect to the Court‟s “superiority” analysis, the Federal Rules suggest that the 3 Court should consider: (A) the class members‟ interests in individually controlling the prosecution or defense of separate actions; 4 5 (B) the extent and nature of any litigation concerning the controversy already begun by or against class members; 6 7 (C) the desirability or undesirability of concentrating the litigation of the claims in the particular forum; and 8 (D) the likely difficulties in managing a class action. 9 10 Fed. R. Civ. P. 23(b)(3)(A)-(D). Uber does not contest the superiority element, and it appears easily satisfied. Given the 12 For the Northern District of California United States District Court 11 very low recovery likely at issue, it seems unlikely that class members will have an interest in 13 individually controlling the prosecution of separate actions. Neither party identifies any pending 14 litigation regarding these claims. Taken together, a class action is a superior method of resolving 15 the class members‟ claims through one adjudication, rather than separate individual suits. 16 C. 17 Standing Finally, Uber argues that the class cannot be certified because many of the class members 18 lack Article III standing. In so arguing, Uber relies on Mazza‟s holding that: “No class may be 19 certified that contains members lacking Article III standing.” Opp. at 23. However, the Ninth 20 Circuit has been clear that “our law keys on the representative party, not all of the class members, 21 and has done so for many years.” Stearns, 655 F.3d at 1021. “In a class action, standing is 22 satisfied if at least one named plaintiff meets the requirements. Thus, we consider only whether at 23 least one named plaintiff satisfies the standing requirements.” Id. (citations and internal 24 modifications omitted). While Mazza quotes from a Second Circuit case to conclude, without 25 explanation, that “No class may be certified that contains members lacking Article III standing,” it 26 did not address Stearns, let alone claim to overrule it. Many district courts have declined to apply 27 the Mazza language and have instead adhered to the Stearns ruling that only one named plaintiff 28 must meet standing requirements. See K.M. v. Blueshield, No. C13-1214 RAJ, 2014 WL 801163, 24 1 at *3 (W.D. Wash. Feb. 27, 2014) (“the court declines to follow the rule cited in Mazza, and 2 instead follows prior Ninth Circuit and Supreme Court precedent that the Article III standing 3 inquiry is only applicable to the named plaintiff, not putative class members”); Waller v. Hewlett- 4 Packard Co., 295 F.R.D. 472, 479 (S.D. Cal. 2013) (“the contrary rule in Mazza comes in a single 5 sentence that cites Second Circuit authority without even acknowledging the earlier Supreme 6 Court and Ninth Circuit authority it is contradicting.”); Arnott v. U.S. Citizenship & Immigration 7 Servs., 290 F.R.D. 579, 584 (C.D. Cal. 2012) (“This single line in Mazza, unexplained and absent 8 any discussion of prior Ninth Circuit precedent, directly contradicts Bates, which was rendered en 9 banc.”). Notably, even in Mazza, the Court found that standing was satisfied based on the paid, or bought it when they otherwise would not have, based on the deceptive practices. 666 F.3d 12 For the Northern District of California Plaintiffs‟ allegation that class members paid more for the CMBS than they otherwise would have 11 United States District Court 10 at 595. 13 Regardless, because of the limited class that the Court will certify, Uber‟s concerns with 14 respect to exposure are alleviated. Thus, Uber‟s arguments with respect to standing do not stand 15 in the way of class certification, as this Court has already ruled that Plaintiff has sufficient 16 standing under the UCL and CLRA, a ruling that Uber does not challenge here.9 See Docket No. 17 64 at 9-15. IV. 18 19 CONCLUSION For the reasons stated above, the Court will certify a class on behalf of the following 20 individuals to pursue their claim that Uber has violated California‟s Unfair Competition Law and 21 the California Legal Remedies Act: “All individuals who received Uber‟s e-mail with the 22 representation that the 20% charge would be gratuity only, who then arranged and paid for taxi 23 rides through Uber‟s service from April 20, 2012 to March 25, 2013.” 24 25 The parties are ordered to meet-and-confer regarding the contents and logistics of class notice and other relevant procedural details. The parties shall stipulate to form of class notice and 26 9 27 28 Uber did not contend that Plaintiff herself lacked standing, just that because some of the putative class members lacked Article III standing, then the entire class as a whole could not be certified. 25 1 a proposed timeline, which shall be submitted to the Court for its approval no later than January 2 7, 2016. The next Case Management Conference (CMC) is scheduled for January 14, 2016 at 3 10:30 a.m.; a joint CMC statement shall be filed by January 7, 2016. 4 This order disposes of Docket No. 99. 5 6 IT IS SO ORDERED. 7 8 9 10 Dated: December 2, 2015 ______________________________________ EDWARD M. CHEN United States District Judge 12 For the Northern District of California United States District Court 11 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 26

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