Another Court of Appeal lines up behind Cohen v. DIRECTV, Inc.

Bad facts make bad law.  Presumably the corollary is that good facts make good settlements, and never become law.  And this is all relevant to the recent decision from the Court of Appeal (Second Appellate District, Division Three).  In Davis-Miller v. Automobile Club of Southern California (pub. Nov. 22, 2011), the Court considered consolidated appeals of the denial of class certification in a case concerning a roadside battery service program that provides jump-starts and sells and installs batteries for stranded motorists.

The trial court concluded that common issues did not predominate.  In particular, the trial court credited evidence showing that most class members needed the batteries they were sold and very few class members were exposed to the alleged false advertising about the roadside assistance program.  Thus, concluded the trial court, commonality could not be satisfied.  Whether you agree with that conclusion depends, in part, upon where you come down on the issue of classwide reliance in UCL cases.  How you apply this case beyond its facts also depends on your point of view.

The Davis-Miller Court embraced the Cohen v. DIRECTV, Inc., 178 Cal. App. 4th 966 (2009) treatment of Tobacco II.  But it did so in the face of sharp criticism.  Steroid Product Hormone Cases concluded that Cohen appeared to have disregarded Tobacco II, saying:

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 IIsupra, 46 Cal.4th at p. 326.)

So how does one resolve this conflict?  Literally applying Tobacco II, its seems inconsistent with the Supreme Court's construction of the UCL to apply any evidence associated with reliance to class claims.  If the named plaintiff has standing, that's the end of the inquiry.  The "likely to deceive" standard of the fraudulent prong of the UCL has not been repealed or changed.  New standing requirements apply only to the named class representative. 

Pragmatically, of course, it's a different story.   Many courts philosophically disagree with the UCL's amalgamation of strict liability and quasi-fraud theories.  Then again, legislation is the perogative of the legislature.  Until the legislature or another ballot initiative changes the UCL's scope substantively, it should be applied consistent with its plain language and the construction supplied by the California Supreme Court.