Christopher Zyda, et al v. Four Seasons Hotels and Resorts, et al

Filing 79

ORDER DENYING DEFENDANTS' MOTION TO DECERTIFY CLASS ACTION re 66 Motion ; re 71 Motion for Joinder. Signed by JUDGE LESLIE E. KOBAYASHI on 03/28/2018. Defendants' Motion to Decertify Class Acti on, filed August 15, 2017 is HEREBY DENIED. The Class has leave to file an amended complaint to add new class representatives for Count I. If Plaintiffs do not amend their complaint to add a class representative with standing to assert Count I, and who can affirmatively demonstrate compliance with the Rule 23(a) prerequisites, before May 1, 2018, Count I will be decertified. (eps, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
CHRISTOPHER ZYDA, On Behalf
of Himself and All Others
Similarly Situated,
Plaintiffs,
vs.
FOUR SEASONS HOTELS AND
RESORTS FOUR SEASONS HOLDINGS
INC.; FOUR SEASONS HUALALAI
RESORT; HUALALAI RESIDENTIAL,
LLC (dba HUALALAI REALTY);
HUALALAI INVESTORS, LLC;
KAUPULEHU MAKAI VENTURE;
HUALALAI DEVELOPMENT COMPANY;
HUALALAI VILLAS & HOMES;
HUALALAI INVESTORS, LLC;
HUALALAI RENTAL MANAGEMENT,
LLC; and DOES 1-100,
Defendants.
_____________________________

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CIVIL 16-00591 LEK

ORDER DENYING DEFENDANTS’ MOTION TO DECERTIFY CLASS ACTION
On August 15, 2017, Defendants Four Seasons Hotels
Ltd., Four Seasons Holdings, Inc. (collectively “Four Seasons
Defendants”), Hualalai Investors, LLC, Hualalai Residential LLC,
and Hualalai Rental Management, LLC’s (collectively “Hualalai
Defendants” and all collectively “Defendants”) filed their Motion
to Decertify Class Action (“Motion”).

[Dkt. no. 66.]

On

August 22, 2017, Intervenors James R. Mahoney, Ann Marie Mahoney,
Judith Runstad, H. Jon Runstad, Jonathan Seybold,
Patricia Seybold, David Keyes, Doreen Keyes, Julie Wrigley,
Kevin Reedy, Lynn Reedy, Bradley Chipps, Donna Chipps, and

J. Orin Edson (“Intervenors”) filed a substantive joinder in the
Motion (“Joinder”).

[Dkt. no. 71.]

Plaintiff Christopher Zyda,

on behalf of himself and all others similarly situated (“Zyda”
and collectively the “Class”), filed their memorandum in
opposition on September 27, 2017, and Intervenors and Defendants
filed their respective reply memoranda on October 10, 2017.
[Dkt. nos. 74, 75, 76.]

The Court finds this matter suitable for

disposition without a hearing pursuant to Rule LR7.2(d) of the
Local Rules of Practice of the United States District Court for
the District of Hawai`i (“Local Rules”).

Defendants’ Motion is

hereby denied for the reasons set forth below.
BACKGROUND
On October 2, 2015, Zyda filed his “Class Action
Complaint for Damages Declaratory and Injunctive Relief”
(“Complaint”) in the Circuit Court of the Third Circuit, State of
Hawai`i (“state court”).

[Notice of Removal of Action Pursuant

to 28 U.S.C. § 1332(d) and 28 U.S.C. § 1453(b), filed 11/1/16
(dkt. no. 1) (“Notice of Removal”), Decl. of William Meheula
(“Meheula Removal Decl.”), Exh. 1 (Complaint).]

On October 14,

2015, Zyda filed his “First Amended Class Action Complaint for
Damages Declaratory and Injunctive Relief” (“Amended Complaint”).
[Id., Exh. 2 (Amended Complaint).]

2

I.

Allegations in the Amended Complaint
Zyda is the owner of real property within the Hualalai

Resort community (“Hualalai”), which is located on the Island of
Hawai`i.

The Hualalai Defendants are owners, developers, and

realtors for Hualalai.

Zyda alleges the Hualalai Defendants

control both the Hualalai Resort (“Resort”) and the Hualalai Club
(“Club”).1

The Hualalai Defendants retained the Four Seasons

Defendants to manage the Resort, the Club, and the hotel at the
Resort.

[Amended Complaint at ¶¶ 4-6.]

Zyda alleges Defendants

induced him and others to purchase homes within Hualalai, as well
as Club memberships, by promising that their family members and
guests would be able to enjoy the Club and Resort facilities
[Id. at ¶ 10.]

“without additional guest fees.”

Zyda alleges

that, after he and other members of the proposed class had
committed substantial resources, “Defendants failed to maintain
and provide adequate facilities to handle the growing
population.”

[Id. at ¶ 11.]

Zyda alleges Defendants continued

to build homes in Hualalai and sell new Club memberships to nonHualalai residents, while falsely complaining that Hualalai

1

The Resort hotel is the Four Seasons Hualalai. The Resort
amenities are integrated with the hotel and include beach
facilities, four swimming pools, and restaurants. The Club
amenities are distinct from the Resort, and include a golf
course, gym, clubhouse, and canoe club. [Motion, Decl. of
William Meheula (“Meheula Motion Decl.”), Exh. R. (Decl. of
Patrick Fitzgerald (“Fitzgerald Decl.”)) at ¶ 25.] Patrick
Fitzgerald is the president and chief executive officer of the
Resort. [Id. at ¶ 1.]
3

homeowners’ guests overburden the Resort.

Without proper cause,

Defendants discouraged members of the proposed class from using
their Club memberships by significantly increasing fees and
charges for unaccompanied guests.2

[Id. at ¶¶ 12-13.]

Zyda

alleges the 2016 DRGFs violated representations Defendants made
to induce sales; and were imposed to favor Defendants’ own
interests regardless of the harm the 2016 DRGFs caused to Class
members’ property values and use and enjoyment of the Club and
Resort.

[Id. at ¶ 13.]

Zyda alleges Defendants continue to

operate the Club and Resort “in secrecy, and fail and refuse to
act openly and in good faith” with regard to the Class’s rights.
[Id. at ¶ 14.]
Zyda brings state law claims for:

violation of the

Condominium Property Act, Haw. Rev. Stat. Chapter 514B
(“Count I”); [id. at ¶¶ 24-29;] violation of the Uniform Land
Sales Practices Act, Haw. Rev. Stat. Chapter 484 (Count II”);
[id. at ¶¶ 30-36;] unfair methods of competition (“UMOC”) and
unfair or deceptive acts or practices (“UDAP”), in violation of
Haw. Rev. Stat. § 480-2

(“Count III”); [id. at ¶¶ 37-40;]

promissory estoppel/detrimental reliance (“Count IV”); [id. at
¶¶ 41-44;] violation of the duty of good faith and fair dealing

2

The fees, called Daily Resort Guest Fees (“DRGFs”), were
initially imposed in 2007 at a rate of $30 per person per day.
[Fitzgerald Decl. at ¶ 36.] The fee schedule effective in 2016
(“the 2016 DRGFs”) charged up to $250 per person per day. [Id.
at ¶ 53.]
4

(“Count V”); [id. at ¶¶ 45-47;] negligent misrepresentation
(“Count VI”); [id. at ¶¶ 48-54;] estoppel (“Count VII”); [id. at
¶¶ 55-58;] unjust enrichment (“Count VIII”); [id. at ¶¶ 59-61;]
organized crime, pursuant to Haw. Rev. Stat. Chapter 842
(“Count IX”); [id. at ¶¶ 62-65;] and breach of fiduciary and
other common law duties (“Count X”), [id. at ¶¶ 66-68].
Zyda seeks:

general, special, treble, and

consequential damages; attorneys’ fees; punitive damages;
injunctive and declaratory relief; a court order requiring
various reforms to Club policies; and any other appropriate
relief.
II.

[Id., Prayer for Relief ¶¶ 1-15.]

Certification Order
On October 13, 2016, the state court issued its Order

Granting Plaintiff’s Motion for Class Certification, Filed
April 26, 2016 (“Certification Order”).
Exh. 3.]

[Meheula Removal Decl.,

The Certification Order defined the Class as:
All purchasers of residential properties in the
Hualalai Resort from 1995 to the present who are
members of the Hualalai Club and whose properties
are subject to a guest fee or other restriction on
the use of Hualalai Resort amenities for any
family member or guest (including rental guest) of
such owner.

[Id. at 2.]

The law firms of Lynch Hopper Smith, LLP and Revere

& Associates LLC were appointed as Class Counsel.

5

[Id.]

III. Removal
On November 1, 2016, before any class notice was
approved, Defendants removed the case pursuant to the Class
Action Fairness Act (“CAFA”), 28 U.S.C. § 1332(d)(2)(A).
of Removal at ¶¶ 16-20.]

[Notice

On March 28, 2017, the Court issued its

Order Denying Plaintiffs’ Motion for Remand (“3/28/17 Order”).
[Dkt. no. 36.3]
IV.

Motion
In the instant Motion, Defendants argue the state

court’s Certification Order does not survive removal.
Alternatively, Defendants move to decertify the Class under Fed.
R. Civ. P. 23.

The Class argues all the Rule 23(a) and 23(b)(3)

requirements are satisfied.
Intervenors are eight Class members who support the
2016 DRGFs and argue they have a fundamental conflict with Zyda.4
Intervenors join Defendants in seeking decertification.
STANDARD
“Class certification is proper only if the trial court
has concluded, after a ‘rigorous analysis,’ that Rule 23(a) has
been satisfied.”

Parsons v. Ryan, 754 F.3d 657, 674 (9th Cir.

2014) (some citations and internal quotation marks omitted)
3

The 3/28/17 Order is available on Westlaw at 2017 WL
1157844.
4

On August 4, 2017, the magistrate judge issued the Order
Granting Amended Motion to Intervene. [Dkt. no. 65.]
6

(quoting Wal–Mart Stores, Inc. v. Dukes, 564 U.S. 338, 351, 131
S. Ct. 2541, 2551, 180 L. Ed. 2d 374 (2011)).

The party seeking

to maintain class certification must “satisfy through evidentiary
proof [the Rule 23(a) requirements and] at least one of the
provisions of Rule 23(b).”
27, 33 (2013).
(a)

Comcast Corp. v. Behrend, 569 U.S.

Rule 23 states, in pertinent part:
Prerequisites. One or more members of a
class may sue or be sued as representative
parties on behalf of all members only if:
(1)
(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

(4)

(b)

the class is so numerous that joinder of
all members is impracticable;

the representative parties will fairly
and adequately protect the interests of
the class.

Types of Class Actions. A class action may
be maintained if Rule 23(a) is satisfied and
if:
. . . .
(3)

the court finds that the questions of
law or fact common to class members
predominate over any questions affecting
only individual members, and that a
class action is superior to other
available methods for fairly and
efficiently adjudicating the
controversy.

7

The Rule 23(a) requirements are known as:
“(1) numerosity; (2) commonality; (3) typicality; and
(4) adequacy of representation.”
(footnote omitted).

Parsons, 754 F.3d at 674

The Rule 23(b)(3) requirements are known as

the “predominance and superiority requirements.”

Baker v. Castle

& Cooke Homes Hawaii, Inc., Civil No. 11–00616 SOM–RLP, 2014 WL
1669158, at *3 (D. Hawai`i Apr. 28, 2014).
The Ninth Circuit has stated:
In evaluating whether a party has met the
requirements of Rule 23, we recognize that
“Rule 23 does not set forth a mere pleading
standard.” Wal–Mart, 131 S. Ct. at 2551. We
therefore require a party seeking class
certification to “affirmatively demonstrate
his compliance with the Rule — that is, he
must be prepared to prove that there are in
fact sufficiently numerous parties, common
questions of law or fact, etc.” Id.
Similarly a party must affirmatively prove
that he complies with one of the three
subsections of Rule 23(b).
Parsons, 754 F.3d at 654.
DISCUSSION
I.

The Class Continues to Exist After Removal
Defendants first argue the state court Certification

Order does not remain in place following removal.

The Ninth

Circuit has stated:
“After removal, the federal court takes the case
up where the State court left it off.” Granny
Goose Foods, Inc. v. Teamsters, 415 U.S. 423, 436,
94 S. Ct. 1113, 39 L. Ed. 2d 435 (1974) (internal
quotation marks omitted). “The federal
court . . . treats everything that occurred in the
8

state court as if it had taken place in federal
court.” Butner v. Neustadter, 324 F.2d 783, 785
(9th Cir. 1963). Consequently, an order entered
by a state court “should be treated as though it
had been validly rendered in the federal
proceeding.” Id. at 786. “[F]ederal rather than
state law governs the future course of
proceedings.” Granny Goose Foods, 415 U.S. at
437, 94 S. Ct. 1113.
Carvalho v. Equifax Info. Servs., LLC, 629 F.3d 876, 887 (9th
Cir. 2010) (alterations in Carvalho).

After removal, the state

court’s Certification Order remains in effect, and the Class
retains its legal status separate from Zyda.

See Pitts v.

Terrible Herbst, Inc., 653 F.3d 1081, 1090 (9th Cir. 2011)
(“[U]pon certification the class acquires a legal status separate
from the interest asserted by the class representative.”
(internal quotation marks and alterations omitted)).
Defendants argue class certification requirements are
less demanding in state court.

Even if that is true, Defendants

are sufficiently protected because a Rule 23 decertification
motion may be brought at any time.

See Lambert v. Nutraceutical

Corp., 870 F.3d 1170, 1182 (9th Cir. 2017) (“The party seeking to
maintain class certification bears the burden of demonstrating
that the Rule 23 requirements are satisfied, even on a motion to
decertify.”).
under Rule 23.

The instant Motion also seeks decertification
The Court therefore examines the Rule 23

requirements in turn.

9

II.

Rule 23(a) Prerequisites
A.

Numerosity
This Court has described the Rule 23(a) numerosity

inquiry as follows:
The numerosity inquiry “requires examination
of the specific facts of each case and imposes no
absolute limitations.” Gen. Tel. Co. of the Nw.,
Inc. v. E.E.O.C., 446 U.S. 318, 330, 100 S. Ct.
1698, 64 L. Ed. 2d 319 (1980). Courts, however,
have found the numerosity requirement to be
satisfied when a class includes at least 40
members. See Consol. Rail Corp. v. Town of Hyde
Park, 47 F.3d 473, 483 (2d Cir. 1995) (noting that
“numerosity is presumed at a level of 40 members”)
(citation omitted); In re Nat’l W. Life Ins.
Deferred Annuities Litig., 268 F.R.D. 652, 660
(S.D. Cal. 2010) (noting that “[c]ourts have found
joinder impracticable in cases involving as few as
forty class members”) (citations omitted);
E.E.O.C. v. Kovacevich “5” Farms, No. CV–F–06–165
OWW/TAG, 2007 WL 1174444, at *21 (E.D. Cal. Apr.
19, 2007) (noting that “[c]ourts have routinely
found the numerosity requirement satisfied when
the class comprises 40 or more members”); Ikonen
v. Hartz Mountain Corp., 122 F.R.D. 258, 262 (S.D.
Cal. 1988) (noting that “[a]s a general rule,
classes of 20 are too small, classes of 20–40 may
or may not be big enough depending on the
circumstances of each case, and classes of 40 or
more are numerous enough”).
Davis v. Abercrombie, Civil No. 11–00144 LEK–BMK, 2014 WL
4956454, at *6 (D. Hawai`i Sept. 30, 2014) (alterations in Davis)
(citation omitted).

According to Defendants, there were 320 Club

members in June 2016.
Decl.”) at ¶ 12.5]
5

[Motion, Decl. of Florian Riedel (“Riedel

The Class is “so numerous that joinder of all

Florian Riedel is the Vice President of Operations at the
(continued...)
10

members is impracticable.”
B.

See Rule (23)(a)(1).

Commonality
1.

Identification of Common Questions

Commonality depends on the “capacity of a classwide
proceeding to generate common answers apt to drive the resolution
of the litigation.”

Wal–Mart, 564 U.S. at 350 (internal

quotation marks and citation omitted).

The Ninth Circuit has

explained that the commonality analysis “does not turn on the
number of common questions, but on their relevance to the factual
and legal issues at the core of the purported class’ claims.”
Jimenez v. Allstate Ins. Co., 765 F.3d 1161, 1165 (9th Cir. 2014)
(citations omitted).
Plaintiffs need not show, however, that
“every question in the case, or even a
preponderance of questions, is capable of class
wide resolution. So long as there is ‘even a
single common question,’ a would-be class can
satisfy the commonality requirement of Rule
23(a)(2).” Wang [v. Chinese Daily News, Inc.],
737 F.3d [538,] 544 [(9th Cir. 2013)] (quoting
Wal–Mart, 131 S. Ct. at 2556); see also Mazza v.
Am. Honda Motor Co., Inc., 666 F.3d 581, 589 (9th
Cir. 2012) (noting that “commonality only requires
a single significant question of law or fact”).
Thus, “[w]here the circumstances of each
particular class member vary but retain a common
core of factual or legal issues with the rest of
the class, commonality exists.” Evon v. Law
Offices of Sidney Mickell, 688 F.3d 1015, 1029
(9th Cir. 2012) (quotation marks and citation
omitted).

5

(...continued)
Four Seasons Resort Hualalai.

[Riedel Decl. at ¶ 1.]
11

Parsons, 754 F.3d at 675 (some alterations in Parsons) (footnotes
omitted).
“Whether a question will drive the resolution of the
litigation necessarily depends on the nature of the underlying
legal claims that the class members have raised.”
F.3d at 1165.

Jimenez, 765

“[T]o assess whether the putative class members

share a common question, the answer to which will resolve an
issue that is central to the validity of each one of the [class
members’s] claims, we must identify the elements of the class
members’s case-in-chief.”

Parsons, 754 F.3d at 676 (internal

quotation marks and citations omitted) (some alterations in
Parsons).
The Class alleges the 2016 DRGFs violate § 480-2 on
both UMOC and UDAP theories.

The Class’s UMOC theory is that the

2016 DRGFs unfairly make Class members’ vacation rental offerings
comparatively less desirable because Defendants’ hotel guests are
not charged DRGFs to access the Resort.

“[C]ompetitive conduct

is unfair when it offends established public policy and when the
practice is immoral, unethical, oppressive, unscrupulous or
substantially injurious to consumers.”

Roberts Hawaii Sch. Bus,

Inc. v. Laupahoehoe Transp. Co., 91 Hawai`i 224, 255, 982 P.2d
853, 884 (1999).6

“It is impossible to frame definitions which

6

Roberts Hawaii was superseded by statute on other grounds
as recognized in Hawaii Medical Ass’n v. Hawaii Medical Service
(continued...)
12

embrace all unfair practices.

There is no limit to human

inventiveness in this field. . . .

Whether competition is unfair

or not generally depends upon the surrounding circumstances of
the particular case.”

Cieri v. Leticia Query Realty, Inc., 80

Hawai`i 61, 67, 905 P.2d 29, 36 (1995).
In support of their UMOC theory, the Class points to
statements Defendants made in 2014 before the Four Seasons
Defendants took over management of the Club.

Defendants stated

that “Four Seasons [will] avoid the potential conflict of
interest” arising from managing facilities for both hotel guests
and Club members, and the Club’s contractual “agreement with Four
Seasons [] ensure[s] no potential conflict would ever happen.”
[Mem. in Opp., Decl. of Class Counsel P. Kyle Smith (“Smith
Decl.”), Exh. 4 (Hualalai FAQ) at 2.]

The Hualalai FAQ also

stated “no access changes for unaccompanied guests or rental
guests [are] part of this merger,” but promised that advance
notice would be provided if changes were later necessary to meet
the expectations of Club members and hotel guests.

[Id. at 4.]

Defendants’ August 2015 announcement of the 2016 DRGFs explained
the fees would increase because of the “the growing rental
population” and because “our Hotel guests [complained of]
pressure on the facilities during peak times.”

6

[Meheula Removal

(...continued)
Ass’n, 113 Hawai`i 77, 107, 148 P.3d 1179, 1209 (2006).
13

Decl., Exh. 7 (1 of 5)7 at 84 (2016 Resort Access FAQ’s).8]
The Class argues the 2016 DRGFs were a substantial
change in policy, which occurred soon after the Four Seasons
Defendants assumed management control of the Club, and which
constituted unfair competition.

Defendants argue contractual

agreements allow hotel guests to be prioritized over Class
members’ guests.

[Fitzgerald Decl. at ¶ 57.]

Whether the 2016

DRGFs constitute an unfair method of competition is a common
question, the answer to which is apt to drive the resolution of
this litigation.
Defendants argue commonality does not exist because not
all Class members rent their homes.

However, “[a]ctions based on

unfair methods of competition . . . are not so limited.

Instead,

HRS § 480–2(e) provides that ‘[a]ny person may bring an action

7

Exhibit 7 is a “copy of all the process, pleadings,
orders, and documents from the State Court Action that Defendants
have been served with in accordance with the requirements of 28
U.S.C. § 1446(a).” [Mehuela Removal Decl. at ¶ 9.] On the
district court’s electronic filing system, Exhibit 7 is divided
into five parts, and each part is a single document that is not
consecutively paginated. All citations to the documents within
Exhibit 7 refer to the page numbers assigned by the electronic
filing system.
8

The 2016 Resort Access FAQ’s are attached as Exhibit 9 to
the Declaration of Christopher Zyda, which is attached to
Plaintiffs’ Motion for Partial Summary Judgment on Their Third
Claim for Relief (Liability for Unfair Competition Under HRS
480), filed November 19, 2015 in the Circuit Court of the Third
Circuit State of Hawai`i (“Zyda Summary Judgment Declaration”).
[Meheula Removal Decl., Exh. 7 (1 of 5) at 66-67 (Zyda Summary
Judgment Decl.).]
14

based on unfair methods of competition.’”

Davis v. Four Seasons

Hotel Ltd., 122 Hawai`i 423, 427, 228 P.3d 303, 307 (2010)
(emphasis and footnote omitted); see also Gurrobat v. HTH Corp.,
133 Hawai`i 1, 23, 323 P.3d 792, 814 (2014) (recovery for UMOC
does not require proof of injury “result[ing] from the
[practice’s] negative effect on competition”; recovery
permissible for any injury “that flows from the defendant’s
conduct that negatively affects competition or harms fair
competition”).

Because all Class members were exposed to the

2016 DRGFs, differences between renters and non-renters are not
likely “to impede the generation of common answers.”

See

Wal–Mart, 564 U.S. at 350 (internal quotation marks and citation
omitted).
The Class’s UDAP theory is that guest access to the
Club and Resort was material to Class members’ home purchase
decisions, and the 2016 DRGFs would have been “likely to affect
their choice of, or conduct regarding,” purchasing a home in the
Hualalai Resort community.

See Courbat v. Dahana Ranch, Inc.,

111 Hawai`i 254, 262, 141 P.3d 427, 435 (2006).

Under § 480-2,

a deceptive act or practice is (1) a
representation, omission, or practice that (2) is
likely to mislead consumers acting reasonably
under the circumstances where (3) the
representation, omission, or practice is material.
A representation, omission, or practice is
considered “material” if it involves information
that is important to consumers and, hence, likely
to affect their choice of, or conduct regarding, a
product. Moreover, the . . . test is an objective
15

one, turning on whether the act or omission is
likely to mislead consumers as to information
important to consumers in making a decision
regarding the product or service.
Id. (brackets, internal citations, quotation marks, and footnotes
omitted).
The Class contends Defendants’ marketing to prospective
home purchasers included the possibility of renting, as shown by
evidence including:

a screenshot of the Hualalai Realty website

describing renting as an option for “Owners . . . looking to
offset some of the fixed costs of ownership”; and an email
describing Defendants’ service of marketing and managing owners’
homes as vacation rentals, including descriptions of nightly
rates and commissions.

[Meheula Removal Decl., Exh. 7 (1 of 5)

at 68 (email), 72 (website screenshot).9]

The Class points to

the residential use restrictions section of Hualalai’s Master
Declaration of Protective Covenants, Conditions and Restrictions
and Reservations of Easements for Hualalai, which states:

“this

provision shall not preclude any Owner in any Residential Area
from renting or leasing[.]”

[Smith Decl., Exh. 1 at 2.]

The Class also relies on deposition testimony of Robert
Kildow (“Kildow”), who is the Hualalai Defendants’ director of
sales.

[Reply, Decl. of William Meheula (“Meheula Reply Decl.”),

9

The email and screenshot are, respectively, Exhibits 1 and
3 to the Zyda Summary Judgment Declaration. [Meheula Removal
Decl., Exh. 7 (1 of 5) at 66-67.]
16

Exh. T (trans. of 10/5/16 depo. of Robert Kildow (“Kildow
Depo.”)) at 11.]

Specifically, Kildow stated:

the ability to

rent is important to some purchasers; [id. at 64;] access to the
Club and Resort is important to renters, and without access, “it
sort of defeats the purpose”; [id. at 74;] if asked about
renting, Hualalai real estate sales agents would describe renting
as “a realistic way to offset some of [the] fixed costs” of home
ownership; [id. at 66;] developers of exclusive communities can
get an initial “jump start” on sales by allowing unrestricted
rentals, but later on, allowing unrestricted rentals becomes
undesirable because it reduces exclusivity; [id. at 202;] the
2016 DRGFs have the effect of discouraging rentals; [id. at 198;]
Hualalai’s real estate documents do not allow for direct
restrictions on rentals; [id.;] and in some seasons, the 2016
DRGFs target renters for higher fees than unaccompanied guests,
[id. at 125].
The Class has thus shown through evidentiary proof that
there are multiple “common contention[s,] such that determination
of [their] truth or falsity will resolve an issue that is central
to the validity of [the Class’s] claim[s] in one stroke.”

See

Jimenez, 765 F.3d at 1165 (internal quotation marks and citation
omitted).

Common factual questions include:

what

representations the Hualalai Defendants made to Class members
before they purchased their homes; what representations the Four

17

Seasons Defendants made to Class members before they took over
management of the Club; and how the 2016 DRGFs impacted the
competitive landscape for rental guests at Hualalai.

Common

legal questions include whether the 2016 DRGFs constituted
either:

an unfair method of competition; or a practice that was

unfair or deceptive, and material, to Hualalai home purchasers.
2.

Oral Misrepresentations Do Not Prevent Commonality

Some Class members allege oral misrepresentations
regarding guest fees before purchasing their homes.

For example,

Zyda states that, before he purchased his home in March 2000,
Defendants represented that his house guests and rental guests
“would be able to freely use . . . Hualalai Club’s facilities
without having to pay additional guest fees.”

[Mem. in Opp,

Decl. of Christopher Zyda (“Zyda Opp. Decl.”) at ¶ 15.]

But

under the 2016 DRGFs, inviting his nephew, wife, and eight
friends to Hualalai for Christmas in 2016 would result in fees of
$17,500 per week.10

[Id. at ¶ 22.]

A former owner declares

that, before he purchased his condo unit in 2005, renting was “a
big part” of his purchase decision, and Defendants “were very
eager to promote” renting.
at ¶¶ 3-4.]

[Mem. in Opp., Decl. of Jim Ullakko

But after the 2016 DRGFs were imposed, he had to

lower his rental rates, and ultimately sold his unit at a

10

Zyda states the $17,500 in DRGFs would be charged above,
and in addition to, the $40,624.97 annual Club membership. [Zyda
Opp. Decl. at ¶ 22.]
18

substantial loss.

[Id. at ¶¶ 9-11.]

Defendants argue commonality is absent because some
Class members deny receiving oral misrepresentations.11

However,

the Class has affirmatively demonstrated compliance with the
commonality requirement based on allegedly deceptive published
marketing materials, without consideration of any evidence of
oral misrepresentations.

See Mazza, 666 F.3d at 589 (only one

“significant question of law or fact” is required); Yokoyama v.
Midland Nat’l Life Ins. Co., 594 F.3d 1087, 1093 (9th Cir. 2010)
(where the plaintiffs alleged annuity marketing brochures’
omissions were deceptive in violation of § 480-2, the district
court abused its discretion in denying certification on grounds
that the “claims ‘involve separate questions of fact as to what
information the independent [sales agents] conveyed’”).

Because

liability under § 480-2 requires an objective “determin[ation]
whether [the marketing] materials are ‘likely to mislead
consumers acting reasonably under the circumstances,’” the factfinder will not be required to “parse what oral representations
each [sales agent] made to each plaintiff.”

See Yokoyama, 594

F.3d at 1093 (quoting Courbat, 141 P.3d at 435).

11

Intervenor James R. Mahoney states that, when he
purchased in 2006, “no one ever told [him] . . . rental guests
would never have to pay an access fee,” and that he understood
that fees or access restrictions could be imposed on rental
guests. [Joinder, Decl. of James R. Mahoney at ¶ 8.]
19

Defendants rely on In re LifeUSA Holdings Inc., 242
F.3d 136, 146-47 (3d Cir. 2001), and argue any claim based on
oral misrepresentations is necessarily individualized.

However,

the Ninth Circuit “favors class treatment of fraud claims
stemming from a common course of conduct,” and explicitly rejects
LifeUSA’s requirement that misrepresentations be uniform.

In re

First Alliance Mortg. Co., 471 F.3d 977, 990 & n.3 (9th Cir.
2006) (citation and internal quotation marks omitted) (citing
LifeUSA, 242 F.3d at 146-47).
3.

Merits Defenses Do Not Destroy Commonality

“Rule 23 grants courts no license to engage in
free-ranging merits inquiries at the certification stage.”

Amgen

Inc. v. Conn. Ret. Plans & Tr. Funds, 568 U.S. 455, 466 (2013).
A common contention need not be one that
“will be answered, on the merits, in favor of the
class.” Amgen, [568 U.S. at 459,] 133 S. Ct. at
1191. It only “must be of such a nature that it
is capable of classwide resolution.” Wal–Mart,
[564 U.S. at 350,] 131 S. Ct. at 2551 (emphasis
added); see Eisen v. Carlisle & Jacquelin, 417
U.S. 156, 178, 94 S. Ct. 2140, 40 L. Ed. 2d 732
(1974) (“In determining the propriety of a class
action, the question is not whether the plaintiff
or plaintiffs have stated a cause of action or
will prevail on the merits, but rather whether the
requirements of Rule 23 are met.”) (quoting Miller
v. Mackey Int’l, 452 F.2d 424, 427 (5th Cir.
1971)). Thus, “whether class members could
actually prevail on the merits of their claims” is
not a proper inquiry in determining the
preliminary question “whether common questions
exist.” Ellis v. Costco Wholesale Corp., 657 F.3d
970, 983 n.8 (9th Cir. 2011). “To hold otherwise
would turn class certification into a mini-trial,”
id., when the purpose of class certification is
20

merely “to select the ‘metho[d]’ best suited to
adjudication of the controversy ‘fairly and
efficiently.’” Amgen, 133 S. Ct. at 1191
(alteration in original).
Alcantar v. Hobart Serv., 800 F.3d 1047, 1053 (9th Cir. 2015)
(some alterations in Alcantar).
Defendants argue commonality does not exist because
home purchase agreements gave Defendants “plenary power to impose
guest fees.”

[Mem. in Supp. of Motion at 23.12]

The existence

of this class-wide defense does not prevent certification.

To

the contrary, it highlights another common question, the
resolution of which is “apt to drive the resolution of the
litigation.”

See Wal–Mart, 564 U.S. at 350 (internal quotation

marks and citation omitted).

Whether home purchase agreements

actually do give Defendants plenary power to impose guest fees is
a merits question inappropriate for a Rule 23 decertification
motion.

See Alcantar, 800 F.3d at 1053.
Defendants make numerous arguments as to the

sufficiency of the Class’s claims and evidence, but these should

12

Defendants assert that the “Amenity Rules attached to
Zyda’s 2000 purchase agreement made clear that guests ‘may be
extended guest privileges’ upon payment of ‘guest
fees and charges’ to be ‘established by Management in its sole
discretion.’” [Mem. in Supp. of Motion at 22 (emphasis omitted)
(quoting Ex. S-7 § 3.3).] Exhibit S is an excerpt of the
July 28, 2016 deposition of Christopher Zyda, with selected
exhibits received at the deposition. Exhibit S includes a copy
of Zyda’s Purchase and Sale Agreement, but not a copy of the
Amenity Rules. [Meheula Motion Decl., Exh. S-2 (Purchase and
Sale Agreement).]
21

be brought in a separate motion to dismiss and/or a separate
motion for summary judgment.

See Wright v. Renzenberger, Inc.,

656 F. App’x 835, 837 (9th Cir. 2016) (A “district court err[s]
in determining merits issues best left for a motion to dismiss or
motion for summary judgment.”).

The Class has affirmatively

demonstrated that “there are questions of law or fact common to
the class.”
C.

See Rule 23(a)(2).

Typicality
The Ninth Circuit has explained that, under

Rule 23(a)(3)’s “permissive standards, representative claims are
‘typical’ if they are reasonably coextensive with those of absent
class members; they need not be substantially identical.”
Parsons, 754 F.3d at 685.

Further, the United States Supreme

Court has noted that:
[t]he commonality and typicality requirements of
Rule 23(a) tend to merge. Both serve as
guideposts for determining whether under the
particular circumstances maintenance of a class
action is economical and whether the named
plaintiff’s claim and the class claims are so
interrelated that the interests of the class
members will be fairly and adequately protected in
their absence.
Wal–Mart, 564 U.S. at 350 n.5 (citation and internal quotation
marks omitted).
Defendants argue Zyda is not typical because he suffers
atypically greater harm from:

1) DRGFs assessed only on extended

family because of his “specific family structure”; and

22

2) restrictions on renters because he rents often.
Supp. of Motion at 20.13]
typicality requirement.

[Mem. in

These arguments misapprehend the
The inquiry looks to the

representative’s “claims or defenses,” not the quantum of the
representative’s damages.

See Rule 23(a)(3).

Moreover,

Defendants’ argument does nothing to suggest Zyda’s claims are
atypical so that Zyda’s pursuit of his own claims will not
“fairly and adequately protect[]” the absent Class members.

See

Wal–Mart, 564 U.S. at 350 n.5.
Zyda is typical because his claims based on the 2016
DRGFs are “reasonably coextensive with those of [the] absent
class members.”
D.

See Parsons, 754 F.3d at 685.

Adequacy
1.

Generally

“Resolution of two questions determines legal adequacy:
(1) do the named plaintiffs and their counsel have any conflicts
of interest with other class members and (2) will the named
plaintiffs and their counsel prosecute the action vigorously on
behalf of the class?”

Hanlon v. Chrysler Corp., 150 F.3d 1011,

1020 (9th Cir. 1998).

The certifying trial court must protect

“the absent class members’ due process right to adequate
13

Defendants submit no evidence showing what family
structure is typical, nor do they explain what is atypical about
Zyda’s objections to Defendants’ definition of “immediate family”
and his objections to restrictions and fees placed on
unaccompanied guests who are extended family.
23

representation” so that binding absent class members to an
adverse judgment is consistent with constitutional due process
guarantees.

See Epstein v. MCA, Inc., 179 F.3d 641, 648 (9th

Cir. 1999).14
Intervenors contend the 2016 DRGFs are:

1) not

unlawful; and 2) beneficial, whether or not they are unlawful.
Defendants argue this difference of opinion creates a conflict of
interest such that Zyda and Class Counsel are inadequate.

It

does not.
Defendants do not argue Zyda and Class Counsel are
conflicted from adequately representing absent Class members’
claims, such that it would be unfair to bind absent Class members
to an adverse judgment.

Amchem Products, Inc. v. Windsor, 521

U.S. 591 (1997), provides a useful example of a conflict of
interest preventing Rule 23(a)(4) adequacy.

In Amchem, some

class members had only been exposed to asbestos, and other class
members were already experiencing asbestos-caused illness.
at 625-27.

Id.

The already ill group favored “generous immediate

payments,” but the exposure-only group favored “an ample,
inflation-protected fund for the future.”

Id. at 626.

This

conflict prevented adequate representation of both groups’
claims.

Id. at 627.

14

Epstein was reversed on other grounds.
Indus. Co. v. Epstein, 516 U.S. 367 (1996).
24

Matsushita Elec.

Rule 23(a)(4) adequacy is not undermined by
Intervenors’ preference that an allegedly unlawful practice
continue.

Nor is adequacy undermined by Intervenors’ concern

that class certification makes it more likely that Defendants
will end the allegedly unlawful practice.

Intervenors’ assertion

that the 2016 DRGFs are not unlawful does not give this Court
“license to engage in free-ranging merits inquiries at the
certification stage.”

See Amgen, 568 U.S. at 466.

Defendants next argue Zyda and Class Counsel are
inadequate because their announced litigation strategy eschews
seeking injunctive relief, and some Class members will value
injunctive relief.

The Court is not troubled by the possibility

that some Class members may prefer a different litigation
strategy.

They may choose subsequently to opt-out to pursue

their claims individually.
Defendants also assert conflicts may arise in
allocating any relief between renters and non-renters.

However,

the Ninth Circuit “does not favor denial of class certification
on the basis of speculative conflicts.”

Cummings v. Connell, 316

F.3d 886, 896 (9th Cir. 2003) (some citations omitted) (citing
Soc. Servs. Union, Local 535 v. County of Santa Clara, 609 F.2d
944, 948 (9th Cir. 1979) (“Mere speculation as to conflicts that
may develop at the remedy stage is insufficient to support denial
of initial class certification.”)).

25

2.

Membership in the Class

To be an adequate Class representative, Zyda must have
standing to raise each and every claim he raises on behalf of the
Class.

See Baker, 2014 WL 1669158, at *10 (citing Hawkins v.

Comparet–Cassani, 251 F.3d 1230, 1238 (9th Cir. 2001) (“A named
plaintiff cannot represent a class alleging [] claims that the
named plaintiff does not have standing to raise.” (alteration in
Baker))).

As to Count I, Defendants argue Zyda lacks standing to

raise claims under the Condominium Property Act because he did
not buy a condominium.

The Class has presented no evidence Zyda

has standing to raise claims under the Condominium Property Act.
Therefore, as to Count I, Zyda is inadequate under Rule 23(a)(4)
and must be dismissed as the Class representative.
Decertification is not appropriate at this time because
the “‘efficient judicial administration weighs in favor of
allowing an opportunity for a new and proper class representative
to enter the case and litigate the interests of’” the absent
Class members asserting Count I.

See id. at *16 (quoting

Birmingham Steel Corp. v. Tenn. Valley Auth., 353 F.3d 1331, 1336
(11th Cir. 2003)).

The Court will “allow a reasonable period of

time for a member of the [C]lass to intervene or to be
substituted as the [C]lass representative.

If, at the end of

that period, no adequate representative has appeared,” the Court
may decertify the action as to Count I.

26

See Birmingham Steel,

353 F.3d at 1343.
Even though Count I is now without a Class
representative, this Court retains subject matter jurisdiction
under CAFA because “continued jurisdiction under § 1332(d) does
not depend on certification,” but rather, whether “a defendant
properly removed a putative class action at the get-go.”

See

United Steel, Paper & Forestry, Rubber, Mfg., Energy, Allied
Indus. & Serv. Workers Int’l Union v. Shell Oil Co., 602 F.3d
1087, 1092 (9th Cir. 2010).

An Article III case or controversy

remains because there is still a live “controversy . . . ‘between
a named defendant and a member of the [certified] class.’”

See

Pitts, 653 F.3d at 1090 (some alterations in Pitts) (quoting
Sosna v. Iowa, 419 U.S. 393, 402 (1975)).
Except as to Count I, the Class has affirmatively
demonstrated compliance with all of the Rule 23(a) prerequisites.
III. Rule 23(b)(3) Certification
A.

Predominance, Generally
The predominance inquiry asks whether the common issues

“are more prevalent or important than the non-common . . .
individual issues.”

Tyson Foods, Inc. v. Bouaphakeo, 136 S. Ct.

1036, 1045 (2016) (internal quotation marks and citations
omitted).
An individual question is one where “members of a
proposed class will need to present evidence that
varies from member to member,” while a common
question is one where “the same evidence will
27

suffice for each member to make a prima facie
showing [or] the issue is susceptible to
generalized, class-wide proof.”
Id. (alteration in Tyson) (quoting 2 W. Rubenstein, Newberg on
Class Actions § 4:50, pp. 196–197 (5th ed. 2012)).
Rule 23(b)(3) “does not require a plaintiff seeking
class certification to prove that each element of her claim is
susceptible to classwide proof.

What the rule does require is

that common questions predominate over any questions affecting
only individual class members.”

Amgen, 568 U.S. at 469

(brackets, internal quotation marks, and citations omitted)
(emphasis in Amgen).
The Rule 23(b)(3) predominance inquiry is
“far more demanding” than Rule 23(a)’s commonality
requirement. Amchem Prods., Inc. v. Windsor, 521
U.S. 591, 624, 117 S. Ct. 2231, 138 L. Ed. 2d 689
(1997). The “presence of commonality alone is not
sufficient to fulfill Rule 23(b)(3).” Hanlon v.
Chrysler Corp., 150 F.3d 1011, 1022 (9th Cir.
1998). Rather, a court has a “duty to take a
close look at whether common questions predominate
over individual ones,” and ensure that individual
questions do not “overwhelm questions common to
the class.” Comcast, 569 U.S. at 34, 133 S. Ct.
1426 (internal quotation marks omitted). In
short, “[t]he main concern of the predominance
inquiry under Rule 23(b)(3) is the balance between
individual and common issues.” Wang v. Chinese
Daily News, Inc., 737 F.3d 538, 545–46 (9th Cir.
2013) (internal quotation marks omitted).
In re Hyundai & Kia Fuel Econ. Litig., 881 F.3d 679, 691 (9th
Cir. 2018).
Defendants argue highly individualized inquiries will
be necessary to determine whether each Class member was injured.
28

Defendants also argue some Class members, such as Intervenors,
suffered no injury because, on net, they enjoy less-crowded
facilities more than they dislike the DRGFs.

Defendants suggest

no workable method to quantify the varying subjective pleasure
each Class member derives from other people being deterred from
accessing the Club and Resort.

Nor do Defendants cite any

authority suggesting such a novel inquiry is required.

To the

extent Defendants identify individualized issues in proving
injury or damages, these issues do not overwhelm questions common
to the Class.

See Compton v. Countrywide Fin. Corp., 761 F.3d

1046, 1053-54 (9th Cir. 2014) (After plaintiffs show a practice
is unfair or deceptive, “Hawaii courts have not set a high bar
for proving” injury or damages.

For example, even if a purchase

is not consummated, “a consumer could recover damages for
‘out-of-pocket expenses for a money order, gasoline, parking, and
wear and tear on [an] automobile that resulted from [an] unfair
business practice.’” (quoting Zanakis–Pico v. Cutter Dodge, Inc.,
98 Hawai`i 309, 319, 47 P.3d 1222, 1232 (2002))).
Defendants next point to variation in the marketing
materials, contractual language, sales presentations, and
salespeople that Class members were exposed to before they
purchased homes.15

Defendants state that home purchase

15

Defendants have neither submitted any examples of later
published materials shown to prospective purchasers that differ
(continued...)
29

agreements always provided Defendants a plenary right to impose
guest fees, but this right was “more explicit” in later
contractual agreements.

[Mem. in Supp. of Motion at 22.]

Defendants also argue more recent purchasers had greater notice
of the 2016 DRGFs because historical increases in the DRGFs
provided notice that the DRGFs might increase further in the
future.16

Defendants “raise issues that may [later] trigger the

formation of subclasses,” but do not raise individual issues or
show that predominance is lacking.
at *13.

See Baker, 2014 WL 1669158,

Decertification is not required “based on speculation as

to what future subclasses will be required.”

See id. at *16.

Defendants next argue predominance is lacking because
Class members vary greatly in how often they have unaccompanied
and/or rental guests.

This suggests individualized and/or

uncertain damages calculations may be required.

Still,

decertification is not appropriate because “[t]he amount of
damages is invariably an individual question and does not defeat
class action treatment.”

See Yokoyama, 594 F.3d at 1094.

The

Ninth Circuit has “repeatedly emphasized that uncertain damages

15

(...continued)
from earlier materials nor explained the significance of any such
differences.
16

No DRGFs were charged until 2007. The fee was $30 in
2007-2011, $45 in 2012, $50 in 2013, $55 in 2014, $65 in 2015,
and up to $250 per person per day in 2016. [Fitzgerald Decl. at
¶¶ 36, 53.]
30

calculations should not defeat certification.”

Lambert v.

Nutraceutical Corp., 870 F.3d 1170, 1182 (9th Cir. 2017).
B.

Predominance as to Damages Methodology
Defendants argue predominance is lacking because the

Class has not shown that “damages are capable of measurement on a
classwide basis.”

See Comcast, 569 U.S. at 34.

The Ninth

Circuit has explained that it has reconciled its holding in
Yokoyama
that uncertain damages cannot destroy class
certification with Comcast’s holding that
plaintiffs must show that their damages are
capable of classwide measurement. . . . Comcast
st[ands] only for the proposition that “plaintiffs
must be able to show that their damages stemmed
from the defendant’s actions that created the
legal liability.” Leyva [v. Medline Indus. Inc.],
716 F.3d [510,] 513-14 [(9th Cir. 2013)].
Uncertainty regarding class members’ damages
does not prevent certification of a class as long
as a valid method has been proposed for
calculating those damages. Id. at 514; see also
Alaska Rent-A-Car, Inc. v. Avis Budget Grp., Inc.,
738 F.3d 960, 970 (9th Cir. 2013) (explaining that
the law “requires only that damages be capable of
measurement based upon reliable factors without
undue speculation”). “[T]he fact that the amount
of damage may not be susceptible of exact proof or
may be uncertain, contingent or difficult of
ascertainment does not bar recovery.” Pulaski [&
Middleman, LLC v. Google, Inc.], 802 F.3d [979,]
989 [(9th Cir. 2015)] (quoting Marsu, B.V. v. Walt
Disney Co., 185 F.3d 932, 939 (9th Cir. 1999));
see also Just Film, Inc. v. Buono, 847 F.3d 1108,
1121 (9th Cir. 2017) (reaffirming that so long as
the proposed damages model is attributable to the
plaintiff’s legal theory of the harm, and damages
can be determined without excessive difficulty,
decertification is not warranted).

31

Lambert, 870 F.3d at 1182 (some alterations in Lambert).

Rule

23(b)(3) only requires that the Class propose a “workable
method.”

Id. at 1184.

A damages model is workable if it

“matche[s the class’s] theory of liability,” and is “supportable
on evidence that could be introduced at trial.”
workable damages model is sufficient.

Id.

One

See id. at 1184 n.11 (not

evaluating alternative proposed damages model); Pulaski, 802 F.3d
at 989 n.9 (same).
The Class proposes six methods of calculating damages,
one of which is a full refund of DRGFs paid (“DRGF Refund
Model”).17

[Mem. in Opp. at 30.]

Defendants have not disputed

the Class’s assertion that the precise amounts owed under the
DRGF Refund Model can be calculated from Defendants’ own records.
Defendants argue “determining who paid what and when would be an
inevitably individualized inquiry.”

[Reply at 15.]

This

argument runs headlong into Yokoyama’s holding that the need for
individual damages calculations cannot defeat class
certification.

See Yokoyama, 594 F.3d at 1094.

Defendants also contend the Class members are not

17

The Class proposes five other models of calculating
damages. They are: diminution in property value; refund of Club
dues; refund of home sales price; value of lost home lending
rights to non-rental guests; and lost rental income. [Mem. in
Opp. at 30-31.] The Court has not considered the merits of these
other five models.
32

entitled to receive refunds because the DRGFs were paid by
guests, not Class members.
as a remedy.

But Hawai`i law allows disgorgement

See Hawaiian Ass’n of Seventh–Day Adventists v.

Wong, 130 Hawai`i 36, 49, 305 P.3d 452, 465 (2013).
“‘Disgorgement is an equitable remedy designed to deprive a
wrongdoer of his unjust enrichment.’”

Sato v. Wahiawa-Cent. Oahu

Health Ctr., Inc., No. CAAP-13-0000042, 2015 WL 1231272, at *22
(Hawai`i Ct. App. Mar. 17, 2015) (quoting S.E.C. v. First City
Fin. Corp., 890 F.2d 1215, 1230 (D.C. Cir. 1989)).

Moreover, the

Ninth Circuit has approved cy pres-only settlements, which cause
the wrongdoer to disgorge his unjust gains, but provide no
recovery for the injured.

In re Google Referrer Header Privacy

Litig., 869 F.3d 737, 742–43 (9th Cir. 2017).

The Court need not

determine damages apportionment at this stage of the litigation.
The DRGF Refund Model is a workable method, and is sufficient for
purposes of the predominance inquiry.
C.

Superiority
“[T]he purpose of the superiority requirement is to

assure that the class action is the most efficient and effective
means of resolving the controversy.”

Id. at 742.

Rule 23(b)(3)

lists four factors pertinent to the superiority inquiry:
(A)

the class members’ interests in individually
controlling the prosecution or defense of
separate actions;

(B)

the extent and nature of any litigation
concerning the controversy already begun by
33

or against class members;
(C)

the desirability or undesirability of
concentrating the litigation of the claims in
the particular forum; and

(D)

the likely difficulties in managing a class
action.

First, in light of the common issues of fact and law in
this case and the minor nature of any individual issues, the
Class members have a minimal interest in individually controlling
the prosecution of this case.

See Epstein, 50 F.3d at 668.

Further, no evidence shows what is the minimum claim that Class
members will assert under the DRGF Refund Model.

It is

theoretically possible that some Class members have claims of
only $250, so that individual litigation would be economically
infeasible.

See Yokoyama, 595 F.3d at 1094 (abuse of discretion

to conclude that individual adjudication was superior when
average damages were $10,000-$15,000).

Second, there is

currently no other litigation concerning this controversy.

This

“is evidence that individuals [do not] have an interest in
controlling their own litigation” in this matter.

See Moore v.

Ulta Salon, Cosmetics & Fragrance, Inc., 311 F.R.D. 590, 624
(C.D. Cal. 2015) (internal quotation marks and citation omitted).
Third, concentrating the litigation in this forum is desirable
because this case was removed under CAFA and because this Court
has already made several rulings in this case.
no apparent manageability problems.
34

Fourth, there are

The names of all Class

members are readily obtainable from Defendants’ own records and
other public records.
Defendants argue individual adjudication is superior
because each Class member has a potentially large claim for
diminution in property value.18

Under some circumstances, large

individual damages may caution against finding superiority.
Zinser v. Accufix Research Inst., Inc., 253 F.3d 1180, 1190-91
(9th Cir. 2001).

In this case, decertification is not required

based on speculation large that damage claims will later be
involved.

As Defendants point out, Class members are highly

sophisticated and aware of this litigation.
Motion at 6, 37.]

[Mem. in Supp. of

The risk is low that some absent Class

members, who in fact prefer to proceed individually, will not
avail themselves of the opportunity to opt out.

This risk does

not outweigh the benefits of proceeding in the form of a class
action.
Defendants and Intervenors argue Intervenors’
opposition to this litigation shows that Class members’ interest
in controlling their own litigation is strong.

Intervenors’

preference that this action not go forward does not undermine the
benefits of this action going forward as a class action, as
compared to proceeding individually.

18

Class members who prefer a

Defendants have raised non-trivial objections to the
Class’s proposed measure for diminution in property damages.
This Court has not evaluated the merits of this proposed measure.
35

different litigation strategy (or none at all) are protected
because they may choose to opt out.
The questions of law or fact common to Class members
predominate over any questions affecting only individual members,
and a class action is superior to other available methods for
fairly and efficiently adjudicating this case.

Except as to

Count I, the Class has affirmatively demonstrated compliance with
Rule 23(a) and Rule 23(b)(3).
CONCLUSION
On the basis of the foregoing, Defendants’ Motion to
Decertify Class Action, filed August 15, 2017 is HEREBY DENIED.
The Class has leave to file an amended complaint to add new class
representatives for Count I.

If Plaintiffs do not amend their

complaint to add a class representative with standing to assert
Count I, and who can affirmatively demonstrate compliance with
the Rule 23(a) prerequisites, before May 1, 2018, Count I will be
decertified.
IT IS SO ORDERED.
DATED AT HONOLULU, HAWAII, March 28, 2018.

/s/ Leslie E. Kobayashi
Leslie E. Kobayashi
United States District Judge

CHRISTOPHER ZYDA, ETC., ET AL. VS. FOUR SEASONS HOTELS AND
36

RESORTS FOUR SEASONS HOLDINGS, INC., ET AL; CIVIL 16-00591 LEKKJM; ORDER DENYING DEFENDANTS’ MOTION TO DECERTIFY CLASS ACTION

37