BARTON et al v. RCI, LLC

Filing 177

MEMORANDUM and ORDER denying 145 Motion to Certify Class. Signed by Judge Peter G. Sheridan on 11/3/2014. (eaj)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY

KENNETH A. BARTON, et a!.,
Civil Action No.: 1O-cv-03657 (PGS)

Plaintiff,

MEMORANDUM AND ORDER

v.
RCI, LLC.
Defendant.

This matter comes before the Court on Plaintiffs motion for “certification of the
transacting class” (ECF No. 145).

Since this is Plaintiffs’ second motion for certification, the

court must determine whether the request is appropriate under Fed. R. Civ. P. 23( c) (l)(C). The
Rule reads as follows:
(c) Certification Order; Notice to Class Members; Judgment;
Issues Classes; Subclasses.

(1) Certification Order.
(A) Time to Issue. At an early practicable time after a person sues
or is sued as a class representative, the court must determine by
order whether to certify the action as a class action.
(B) Defining the Class; Appointing Class Counsel. An order that
certifies a class action must define the class and the class claims,
issues, or defenses, and must appoint class counsel under Rule
23(g).
(C) Altering or Amending the Order. An order that grants or
denies class certification may be altered or amended before
final judgment.

Generally a Court may revisit a prior denial of a class certification motion if there is a change in
the circumstances or facts since the prior denial. Gutierrez v. Johnson & Johnson, 269 F.R.D.
430, 433-34 (D.N.J. 2010). One district court explained that “in the absence of materially

changed or clarified circumstances

.

.

.

the Court should not condone a series of arguments.

Washington v. Vogel, 158 F.R.D. 689 (M.D. Fla. 1994). Often a Court reviews class certification
early in the litigation; however, over time and discovery of facts about the class, the composition
of the class may evolve. As such, the Court has a duty to monitor its class decisions in light of
evidentiary developments. Richardson v. Byrd, 709 F.2d 1016 (5th Cir. Tex. 1983); Tern/I v.
Electroijix Home Prods., 274 F.R.D. 698, 700 (S.D. Ga. 2011). In this motion, for the most part,
the motion to certify the transacting class is based on the same facts as set forth in the first
motion to certify a class. (ECF No. 141).
The defendant, RCI, operates a program which allows a timeshare owner to deposit
his/her timeshare interval, and exchange it for a different timeshare (vacation exchange), or for a
variety of services including, but not limited to, airline tickets (“Points Program”). At the Blue
Bay Resort located in Mexico, all of the named Plaintiffs exchanged a period of nights for points.
These accumulated points could be redeemed for airline tickets. The Complaint alleges that
class members accumulated points to redeem for airline tickets. This was a far better value than
vacationing at the Blue Bay Resort or exchanging them for a different timeshare. As such,
putative class members would buy many nights at the Blue Bay and exchange them for points.
Under the RCI program, the use of the points could be accelerated.
At some point, RCI realized it was losing money on the redemption of points for airline
tickets, and RCI unilaterally imposed a cap of 60,000 points that could be used annually to
purchase airline tickets. According to the Complaint, the cap blocked putative class members
from redeeming their points to buy airline tickets because a single ticket had a point value of
45,000 points. In the first motion for class certification, the putative class members had acquired
more than 60000 points and were therefore impacted by the cap. The class was defined as:

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All persons residing in the United States who entered into a
Participation Agreement with RCT at a Blue Bay Resort prior to
February 29, 2008, who had more than 60,000 points as of
September 1, 2008, and who have not entered into a release.

According to counsel for the class, about 86% of the class members (3,523) suffered a loss under
this initial methodology. However, that percentage was in error. According to the facts RCI
developed in refuting certification, it found 1,195 of the 3,523 proposed Blue Bay members
never transacted with RCI in the Points Program or vacation exchange program. Of the 2,328
remaining members, an additional 430 never used the Points Program. As such, the Court found
the putative class was overbroad because so many members never used the Points Program, and
therefore no relationship existed between a class member and loss of the ability to redeem for
airline tickets.
About a month after denying the first motion for class certification, Plaintiff filed its
motion for certification of the transacting class. The proposed class is narrowed to 1,339
members who redeemed points in excess of 55,000 points prior to February 29, 2008. The
proposed class is defined as:
All persons residing in the United States who entered into a
Participation Agreement with RCI at a Blue Bay Resort prior to
February 29, 2009, and for whom RCI’s records reflect at least one
Points Partner exchange in excess of 55,000 points prior to
February 20, 2008.

Plaintiffs argue that each class member had at least one transaction wherein 55,000 points were
redeemed; and one could reasonably deduce that another redemption by such participants in the
same amount would most likely recur.

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The Court must determine whether there are significant changes in circumstances which
warrant a review of the transacting class certification. Class counsel’s brief and revised expert
report show no change of circumstances. Moreover, there was little, if any, discovery completed
between April 1, 2014 (denial of initial class certification motion) and May 5, 2014 (the date of
the new motion), hence, no new facts were disclosed. In addition, there were no material updates
in the law which may show a change of circumstances. In fact, the expert (Dr. Goedde)
employed the same “before and after” methodology in both class motions, and class counsel
relies on the same named Plaintiffs. In the absence of any material change in circumstances, the
Plaintiff does not meet the standard to certify a new class. The motion is denied. In re
FleetBoston Fin. Corp. Sec. Litig., 2007 U.S. Dist. LEXIS 87425 (D.N.J. Nov. 28, 2007).
ORDER

This matter having comes before the Court on Plaintiffs motion for certification of a
transaction class (ECF No. 145); for the reasons set forth above;
IT IS on this 3 day of November, 2014;
ORDERED that the motion to certify the transacting class (ECF No. 145) is denied.

PETER G. SHERIDAN, U.S.D.J.

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