District Court (N.D. Cal.) certifies class of consumers claiming Dell, Inc. misrepresented savings by stating false former prices

United States District Court Judge Ronald M. Whyte (Northern District of California) granted in part a motion to certify a class of citizens of California who on or after March 23, 2003, purchased via Dell's web site Dell-branded products advertised with a represented former sales price.  Brazil v. Dell, Inc., 2010 WL 5387831 (N.D. Cal. Dec. 21, 2010) [not to be confused with the Court's Order on a motion for judgment on the pleadings filed the same day].  The Court offered this interesting discussion concerning reliance:

In California, “a presumption, or at least an inference, of reliance arises wherever there is a showing that a misrepresentation was material,” In re Tobacco II Cases, 466 Cal.4th 298, 397 (2009). Materiality is an objective standard, see U.S. v. Watkins, 278 F.3d 961, 967-68 (9th Cir.2002), and is susceptible to common proof in this case. There is no dispute that the alleged misrepresentations were communicated to all class members, because the representations were made at the point of sale as part of a standardized online purchasing process.

Plaintiffs point to common evidence sufficient to show that the representations were material to plaintiffs. Although Dell points to some testimony from plaintiffs that it says “fails to establish legally sufficient reliance for even their individual claims,” the court finds that testimony read in context sufficiently indicated that the plaintiffs relied. There is evidence that Dell considered the representations material, and that external reference prices and semantic clues impact customers' perceptions of value and purchase decisions. Dell's marketing expert contends that while some purchasers may attach importance to a discount off Dell's list price, others will base their decision on wholly unrelated factors. But under California law, plaintiffs need not establish that each and every class member based his or her decision on the represented discounts. Plaintiffs' common evidence that the representations were material satisfies California's reliance presumption and Rule 23(b) (3)'s predominance requirement.

Slip op., at 5.

A similar practice by Dell almost caught me about a year ago.  I ordered a computer on the basis of a claim that I was receiving a special, limited-time discount.  I then discovered through another source that the prevailing price at the time was lower.  I cancelled the order before it shipped and re-ordered at a significantly lower price.  I'm pretty happy with Dell computers from a hardware standpoint, but their sales tactics have some room for improvement.

District Court denies motion to stay proceedings and compel arbitration while Concepcion is pending

United States District Court Judge Ronald M. Whyte (Northern District of California) denied a motion to compel arbitration, dismiss claims, or stay the matter.  Weisblatt v. Apple, Inc., 2010 WL 4071147 (N.D. Cal. Oct. 18, 2010).  The suit concerns the change away from the unlimited data plan associated with the Apple 3G-enabled iPad.  AT&T Mobility LLC moved to compel arbitration and to dismiss all claims against it.  In the alternative, AT&T Mobility moved for a stay pending a Supreme Court decision in AT&T Mobility LLC v. Concepcion, --- U.S. ----, 130 S.Ct. 3322, 176 L.Ed.2d 1218 (2010) (No. 09-893).  Defendant Apple joined in the motion to stay.

The Court denied the motion, without prejudice, saying:

Given the likelihood that the Supreme Court will speak directly to the class action waiver issue in Concepcion, compelling arbitration at this point would be unwarranted. Even though plaintiffs' arguments regarding the unconscionability of the class action waiver may have less merit under New York law, a Supreme Court decision in Concepcion is still likely to simplify the issue. Accordingly, ATTM's motion to compel arbitration is denied without prejudice.

Slip op., at 3.  The Court went on to hold:

On balance, the court finds that a stay is unwarranted. That said, the claims with respect to ATTM will likely be affected by the Supreme Court's decision in Concepcion.  Accordingly, it makes little sense to begin discovery with respect to the claims focused on ATTM. Also, the court at this time declines to decide whether plaintiff Hanna's iPhone 3GS arbitration agreement now applies to his iPad dispute. In any event, Concepcion is likely to clarify the enforceability of the iPhone 3GS arbitration agreement as well as the iPad arbitration agreement.

Slip op., at 4.  The Court then limited discovery to written discovery against Apple.

Conditionally certified FLSA class of United Auto Credit Corporation Supervisors classified as exempt

United States District Court Judge Ronald M. Whyte (Northern District of California) granted United Auto Credit Corporation's motion to decertify a class of California-based Supervisor (and related) employees after the class was conditionally certified under the FLSA.  Hernandez v. United Auto Credit Corporaiton (N.D. Cal. Apr. 2, 2010) 2010 WL 1337702.  In FLSA actions, many Courts employ a two-phase process for "certification" of FLSA classes, an approach used by the trial court here:

Under the two-step approach, the court first considers whether to certify a collective action and permit notice to be distributed to the putative class members. See Thiessen, 267 F.3d at 1102; Russell v. Wells Fargo & Co., 2008 WL 4104212, at *2-3 (N.D.Cal. Sept.3, 2008). At this first stage, the standard for certification is fairly easy to satisfy. Courts have required only “substantial allegations, supported by declarations or discovery, that the putative class members were together the victims of a single decision, policy, or plan.” Russell, 2008 WL 4104212, at *2.

At the second stage, after discovery has been taken, the court may decertify the class if it concludes that the class members are not similarly situated. Id. at *3. The court can consider a number of factors in deciding whether an action should ultimately proceed collectively, including: (1) the disparate factual and employment settings of the individual plaintiffs; (2) the various defenses available to the defendant and whether they appear to be individual to each plaintiff; (3) fairness and procedural considerations; and (4) whether plaintiffs made the required filings before filing suit. Thiessen, 267 F.3d at 1103. However, a requirement that the class members be identical would be inconsistent with the intent of FLSA's provision that a case can proceed as a collective action. Pendlebury v. Starbucks Coffee Co., 518 F.Supp.2d 1345, 1361 (S.D.Fla.2007).

Slip op., at 2.  The motion filed by the defendant in this case concerned the more rigorous showing required in the second stage.  (Side Note:  The Ninth Circuit has not yet explicitly held that it concurs with the two-stage approach, but District Courts have been employing that approach in the Ninth Circuit for many years without opposition.)

In the course of briefing, the plaintiffs apparently advanced the novel argument that the supervision requirement included in the executive exemption test created a ratio requirement where an employer had to show that there were at least two non-exempt employees for every executive:

Plaintiffs' argument overstates the requirement of the pertinent FSLA regulation. Plaintiffs are correct that in order to qualify for the executive exemption, an employee must “customarily and regularly direct[ ] the work of two or more other employees.” 29 C .F.R. § 541.100(a)(3). The language of the regulation, however, does not require a strict mathematical ratio between an “employee employed in a bona fide executive capacity” and “other employees.” All the regulation requires is that an employee customarily or regularly direct the work of two or more other employees. The other employees whose work the executive directs may or may not themselves be executives. Thus, the FLSA does not create a “ratio requirement.” Whether the present conditional class should be decertified, then, depends on the individualized assessment of whether the class members are “similarly situated.” The court now turns to that inquiry.

Slip op., at 3.  No dice.  Turning to the merits of the motion by defendant, the Court, as did the District Court in Weigele v. Fedex (discussed here), placed little weight on the uniform classification of employees by a central office:  "[T]he recent decision of In re Wells Fargo Homes Mortg. Overtime Litig., 571 F.3d 953 (9th Cir.2009), which involved certification under Federal Rule of Civil Procedure 23(b)(3), cautions against placing too much weight on an internal policy of classifying all members of a particular class of employees as exempt."  Slip op., at 5.  More importantly, however, the Court discussed the plaintiffs' inability to rebut substantial evidence showing great disparity in the job duties of different Supervisors.

Are there really that many large businesses out there that let their employees do whatever they want?