Breaking News: Tacit rebuke of Cohen becomes explicit in modified opinion issued in Steroid Hormone Product Cases

In Steroid Hormone Product Cases (January 21, 2010), the Court of Appeal (Second Appellate District, Division Four) reversed an order denying class certification and made some statements that seemed to be an implied rebuke of Cohen's treatment of In re Tobacco II Cases (2009) 46 Cal.4th 298 (Tobacco II).  (See this post for discussion of original decision.)  Today, the Court issued a modified opinion that explicitly rejects Cohen.  The full passage regarding Cohen is set forth below:

After we issued our opinion, GNC petitioned for rehearing, arguing that two recent cases from the Second Appellate District -- Cohen v. DIRECTV, Inc. (2009) 178 Cal.App.4th 966 (Cohen) and In re Vioxx Class Cases (2009) 180 Cal.App.4th 116 (Vioxx) -- support the trial court's denial of class certification in this case. Both cases are distinguishable.

In Cohen, the plaintiff alleged that DIRECTV violated the UCL and the CLRA by inducing subscribers to purchase high definition television services through misrepresentations in DIRECTV‟s advertising that DIRECTV's broadcast of those channels would meet certain technical specifications. (Cohen, supra, 178 Cal.App.4th at pp. 969-970.) In opposing class certification, DIRECTV submitted evidence that many subscribers had never seen, or did not remember seeing, advertisements with the alleged misrepresentations about the technical specifications, and purchased the services at issue due to other factors. (Id. at p. 970.) The trial court found that common issues of fact did not predominate because the allegedly fraudulent representations were not uniformly made to or considered by the class members. (Id. at p. 973.)

The appellate court affirmed. In discussing the UCL claim, the appellate court noted that Tobacco II, supra, 46 Cal.4th 298, was irrelevant to class certification because it addressed only the issue of standing, and did not instruct "our state's trial courts to dispatch with an examination of commonality when addressing a motion for class certification." (Cohen, supra, 178 Cal.App.4th at p. 981.) The court then concluded that the trial court's concern that the plaintiff's UCL and CLRA claims would involve individual factual issues regarding class members' reliance on the alleged misrepresentations “was a proper criterion for the court's consideration when examining 'commonality' in the context of the subscribers' motion for class certification, even after Tobacco II.” (Ibid.)

We agree that Tobacco II did not dispense with the commonality requirement for class certification. But to the extent the appellate court's opinion might be understood to hold that plaintiffs must show class members' reliance on the alleged misrepresentations under the UCL, we disagree. As Tobacco II made clear, Proposition 64 did not change the substantive law governing UCL claims, other than the standing requirements for the named plaintiffs, and "before Proposition 64, 'California courts have repeatedly held that relief under the UCL is available without individualized proof of deception, reliance and injury.'[Citation.]" (Tobacco II, supra, 46 Cal.4th at p. 326.) But in any event, the Cohen court's discussion regarding the appropriateness of considering class members' reliance when examining commonality is irrelevant here, where the UCL claim is based upon the unlawful prong of the UCL and thus presents no issue regarding reliance.

Modification Order, at 1-3.