While the appellate court opinions that have avoided Tobacco II received extensive commentary in the media, including here, not all Courts of Appeal have followed that course. In Weinstat v. Dentsply International, Inc. (January 7, 2010), the Court of Appeal (First Appellate District, Division Four) considered an appeal from an order decertifying a class of dentists as to their causes of action under the unfair competition law (UCL) and for breach of express warranty against the manufacturer of the Cavitron ultrasonic scaler (Cavitron). The trial court decertified the class, based upon an "appellate court decision interpreting the Proposition 64 amendments to the UCL as requiring that all class members—not just the representatives—show an injury in fact." Slip op., at 1. The Court was swift in rejecting that basis for decertification: "Recently, the state's high court issued its decision in In re Tobacco II Cases (2009) 46 Cal.4th 298 (Tobacco II). Tobacco II rejects the legal premises underpinning the decertification order as to the UCL claim and mandates reversal." Slip op., at 1.
The Court of Appeal continued with its summary of its Order reversing the decertification order:
We must also reverse the order decertifying the class as to the breach of express warranty claims. Procedurally, the order was improper because it was rendered in the absence of new law or evidence. Substantively, the order was contrary to law because it improperly grafted an element of prior reliance onto the express warranty claims; this error infected the entire ruling as to those claims.
Slip op., at 1. As did the Court of Appeal in Vioxx, the Court here outlined the contours of a UCL claim after Tobacco II:
In Tobacco II, our Supreme Court rejected the rationale that informed the trial court's decertification order. First, it held that Proposition 64's standing requirements for UCL actions apply only to the class representatives. (Tobacco II, supra, 46 Cal.4th at p. 306.) Second, the standing requirements as modified by Proposition 64 impose an actual reliance requirement on representative plaintiffs prosecuting a private enforcement action under the fraud prong of the UCL. (Id. at p. 326.) Further, while only the class representative need establish personal reliance on the defendant's misrepresentation or nondisclosure resulting in damage, the representative need not show that such reliance was “ ' “the sole or even the predominant or decisive factor in influencing his conduct. . . . It is enough that the representation has played a substantial part, and so has been a substantial factor, in influencing his decision.” [Citation.] [¶] Moreover, a presumption, or at least an inference, of reliance arises wherever there is a showing that a misrepresentation was material. [Citations.]' ” (Id. at pp. 326-327.) A misrepresentation is “material” if a reasonable person would attach importance to its existence or nonexistence in deciding his or her course of action in the transaction in question. (Id. at p. 327.) Finally, the class representative need not demonstrate individualized reliance on a specific misrepresentation. (Ibid.)
Slip op., at 7. The defendant, at oral argument, "took a different tack" and argued that the Court of Appeal should "affirm the UCL decertification order because one of the trial court's UCL decertification rulings was untainted by Proposition 64 standing concerns, namely the ruling that the UCL claims were inappropriate for class treatment because individual issues about the nature and extent of any material misrepresentation would predominate over common issues," citing Kaldenbach v. Mutual of Omaha Life Ins. Co., 178 Cal.App.4th 830, 844 (2009). Slip op., at 7, n. 8. While not directly commenting on Kaldenbach, the Court said:
First, procedurally this ruling was improper because Dentsply offered no new law or newly discovered evidence regarding the nature and extent of any material misrepresentation. (See post, pt. II.B.2.) Second, the ruling was substantively wrong.
The UCL prohibits as unfair competition “any unlawful, unfair or fraudulent business act or practice . . . .” (Bus. & Prof. Code, § 17200.) The act focuses on the defendant’s conduct, rather than the plaintiff's damages, in keeping with its larger purpose of protecting the general public against unscrupulous business practices. (Tobacco II, supra, 46 Cal.4th at p. 312.) This case involves alleged uniform fraudulent practices—misrepresentations regarding the Cavitron's safety for surgical use and the concomitant nondisclosure of biofilm risk—by Dentsply, directed to the entire class. To sustain a UCL cause of action based on such fraudulent or deceptive practices, a plaintiff must show that “ ' “members of the public are likely to be deceived.” ' ” (Aron v. U-Haul Co. of California (2006) 143 Cal.App.4th 796, 806, quoting Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 211; Massachusetts Mutual Life Ins. Co. v. Superior Court (2002) 97 Cal.App.4th 1282, 1291; accord, Kaldenbach v. Mutual of Omaha Life Ins. Co., supra, 178 Cal.App.4th at p. 847.)
A plaintiff's burden thus is to demonstrate that the representations or nondisclosures in question would likely be misleading to a reasonable consumer. (See Aron v. U-Haul Co. of California, supra, 143 Cal.App.4th at p. 807.) The question of materiality, in turn, is whether a reasonable person would attach importance to the representation or nondisclosure in deciding how to proceed in the particular transaction—in other words, would a reasonable dentist attach importance to Dentsply's claim that the Cavitron was safe for use in surgery. (Tobacco II, supra, 46 Cal.4th at p. 327.) The safety of the Cavitron would be material to any dentist regardless of when the representation was made. The materiality of Dentsply's representations concerning the Cavitron's safety for surgical uses was established objectively by appellants' actual use of the device for oral surgery, in accordance with those representations, regardless of whether appellants saw the Directions before or after purchasing the device. There are no individual issues concerning the nature and extent of material misrepresentations.
Slip op., at 8, n. 8. The Court then directed the trial court to consider the limited question of whether the plaintiffs could meet the standing requirement outlined in Tobacco II: "We remand for the limited purpose of determining whether the named representatives can meet the UCL standing requirements announced in Tobacco II and if not, whether amendment should be permitted." Slip op., at 9.
The Court of Appeal then considered the decertification ruling as it related to the breach of warranty claim. In doing so, the Court held that a party seeking to decertify a certified class must demonstrate new facts and circumstances, as with any other motion for reconsideration:
Dentsply is adamant that there is no requirement of changed circumstances or new evidence when the trial court revisits certification prior to a decision on the merits. The dicta in Green v. Obledo, supra, 29 Cal.3d 126, quoted above, concerning prejudgment decertification, would suggest otherwise. The standard announced in Green allows flexibility while curtailing defendant abuse. In the case at hand, Dentsply's motion for decertification was accompanied by changed circumstances, most notably the Pfizer decision. However, this circumstance only pertained to the UCL cause of action. Nevertheless, the trial court went on to address Dentsply's reassertions as to why the breach of warranty class should be decertified as well. Decertifying one theory should not sanction decertifying another absent some commonality with the changed circumstance or some other situation justifying reconsideration. Here there was none.
Slip op., at 11-12. Then, over another 11 pages of opinion, the Court of Appeal explained the basis for the following observation:
The lower court ruling rests on the incorrect legal assumption that a breach of express warranty claim requires proof of prior reliance. While the tort of fraud turns on inducement, as we explain, breach of express warranty arises in the context of contract formation in which reliance plays no role.
Slip op., at 12. Does this opinion add any fuel to the Cohen Petition for Review currently before the California Supreme Court?
The shockwaves of Tobacco II continue. Today, the Court of Appeal (Second Appellate District, Division Three) published its Opinion in Pfizer v. Superior Court (March 2, 2010) after the matter was remanded by the California Supreme Court following the Tobacco II decision. The Court focused heavily on the length of time and extent of the advertising campaign for Listerine that was at issue in the case. Less than half a year and sporadic distribution wasn't enough to convince the Court to apply Tobacco II. So now we have Morgan, et al. v. AT&T Wireless Services, Inc. (September 23, 2009), that found an advertising campaign of around a year to be long enough for a reliance inference, but just under half a year is insufficient. I suppose those 8-month ad campaigns will be judged on a fact-intensive analysis that looks at whether the ads were continuous and pervasive or sporadic and poorly circulated.
