The “Commonality” Hurdle: Class Certification Becomes More Difficult in California

Summary

California courts deny class certification in call recording class actions because the classes fail to meet the “commonality” requirement in the Federal Rules of Civil Procedure.

Article

Companies that routinely record calls for customer service purposes should know that class actions in California are increasingly common.  Recent decisions in California may make it harder for plaintiffs to certify classes, taking most of the sting out of some abusive lawsuits.

Under the California Invasion of Privacy Act (“CIPA”), all parties must consent to call monitoring of a confidential communication.  Cal. Penal Code § 632(a).  Another California law requires all parties consent to monitoring of a communication if the call is made with a cellular or wireless phone.  Id. at § 632.7(a).  This section does not require a confidential communication.

Federal Rules require that “there are questions of law or fact common to the class,” also known as the “commonality” requirement, for a court to certify the class.  Fed. R. Civ. P. 23(a)(2).  The rule promotes judicial economy by allowing for litigation of those common questions of law and fact at one time.  See Califano v. Yamasaki, 442 U.S. 682, 701 (1979). 

The “commonality” requirement for a class action requires more than common questions of fact, but also common answers to those questions.  See Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (U.S. 2011).  In Wal-Mart, the Court ruled:

Commonality requires a plaintiff to demonstrate that class members have suffered the same injury. This does not mean merely that they have all suffered a violation of the same provision of law.

Id. at 2551.

Two recent cases in California have held that alleged class violations of California’s call monitoring and recording statutes require individualized factual inquiries, common questions of fact do not predominate, and thus the classes fail to satisfy the “commonality” requirement and cannot be certified.

In Torres v. Nutrisystem, Inc., the Court denied plaintiff’s class certification for its claim against Nutrisystem for allegedly recording customers’ telephone calls without notice in violation of Cal. Penal Code § 632 because it did not satisfy the “commonality” requirement.  289 F.R.D. 587, 592 (C.D. Cal. 2013). 

Plaintiff argued the class satisfied the “commonality” requirement because the case was based on the defendant’s identical conduct, which caused the same injury to both plaintiff and class members.  Id. at 591.  Plaintiff pointed to four questions which she claimed did not vary from class member to class member, and which could be determined without reference to the individual circumstances of any class member.  Id.

(a) Whether Defendant intentionally records or monitors confidential telephone communications; (b) Whether Defendant obtains consent before intentionally recording or monitoring confidential telephone communications; (c) Whether Defendant’s conduct constitutes a violation of [the] California Penal Code …; (d) Whether, as a result of Defendant’s misconduct, Plaintiff and the Class are entitled to damages, restitution, equitable relief and other relief ….

Id. at 592.  The Court disagreed with plaintiff’s argument and held that:

Ms. Torres argues that these “common questions will generate common answers in a class-wide proceeding,” thus satisfying the commonality requirement. However, the answers to these questions are likely to vary significantly among class members given that the confidentiality and consent issues require individualized factual inquiries into the circumstances of each class member.

Id. at 592.  Thus, the Court denied plaintiff’s motion for class certification because common questions of fact did not predominate.

Similarly, in Hataishi v. First Am. Home Buyers Prot. Corp., the Superior Court of Los Angeles County denied plaintiff customer’s motion for class certification in an action alleging that defendant, a home-warranty company, recorded customer telephone conversations without warning in violation of Cal. Penal Code § 632(a).  2014 Cal. App. LEXIS 162, *1 (Cal. App. 2d Dist. 2014).

On appeal, the Court stated:

Plaintiff’s unique circumstances - including the fact that she had made approximately a dozen calls to First American during which she was told that the call “may be monitored or recorded” - sets her apart, for purposes of assessing the reasonableness of her expectations, from other customers who never heard the disclosure or heard it only a few times. Likewise, Plaintiff’s prior experience with other businesses - the “dozens and dozens and dozens” of telephone calls where she understood her call could be recorded or monitored for quality assurance - could support a jury finding that she lacked an objectively reasonable expectation that her calls with First American would not be recorded. A jury could rationally reach a different conclusion concerning another plaintiff who has not had the same experience.

Id. at *25-26.  The Court held that the substantial evidence supported the trial court’s conclusion that assessing the objective reasonableness of an individual plaintiff’s expectation of confidentiality will require individualized proof of the plaintiff’s prior experiences with First American and other business communications.  Id. at *26.  Thus, the plaintiff failed to satisfy the “commonality” requirement and class certification was denied.

The Hataishi court also concluded that adding a § 632.7 claim would not have removed the need to engage in an individualized factual inquiry.  Id. at *28.

Even if a section 632.7 claim were added, this would not eliminate the need to determine what type of telephone was used, because the elements of a section 632 claim differ from those of a section 632.7 claim. In particular, to determine whether an individual plaintiff will be required to establish that the subject call was a “confidential communication” - as required by section 632 for landline communications, but not by section 632.7 for cellular or cordless telephone communications - the trier of fact must first determine what type of telephone was used to receive the subject call. That determination, as the trial court found, will require an individualized call-by-call inquiry.

Id. at *28-29.  Therefore, the Court denied class certification because common questions of fact did not predominate.  Id.

While these cases support defense of these actions, businesses should continue to focus their efforts on compliance and ensure that all calls to or from California consumers disclose that the calls may be monitored or recorded.